1.Find the growth rate of nominal GDP for 2019.Find the growth rate of real GDP for 2019. Why are they different?In which year is the share of nominal consumption over Nominal GDP the largest? (Show how you reach this conclusion)In which year is the share of real consumption over Real GDP the largest? (Show how you reach this conclusion)Compute the inflation rate using the GDP Deflator (2016 is the base year) for 2018. Year20162017201820192020Quantity ofDarhash Tea2'5002'2002'1001'8001'500Price ofDarhash Tea1014151516Quantity ofPrice ofYoushemi Tea Youshemi Tea1'0009001'0007005001515202530Quantity ofAvocadoToasts3'0003'0003'0003'0002'500Price ofAvocadoToasts12221Quantity of Price ofUFOSUFOS1086LO551'0001'2001'4001'3001'300 Year20162017201820192020Nominal GDP5300059900659005700048000Real GDP5300046500450003650030000GDP Deflator100.00128.82146.44156.16160.00

Answered: 1. Find the growth rate of nominal GDP…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Find the growth rate of nominal GDP for 2019.
Find the growth rate of real GDP for 2019. Why are they different?
In which year is the share of nominal consumption over Nominal GDP the largest? (Show how you reach this conclusion)
In which year is the share of real consumption over Real GDP the largest? (Show how you reach this conclusion)
Compute the inflation rate using the GDP Deflator (2016 is the base year) for 2018.

Year
2016
2017
2018
2019
2020
Quantity of
Darhash Tea
2'500
2'200
2'100
1'800
1'500
Price of
Darhash Tea
10
14
15
15
16
Quantity of
Price of
Youshemi Tea Youshemi Tea
1'000
900
1'000
700
500
15
15
20
25
30
Quantity of
Avocado
Toasts
3'000
3'000
3'000
3'000
2'500
Price of
Avocado
Toasts
1
2
2
2
1
Quantity of Price of
UFOS
UFOS
10
8
6
LO
5
5
1'000
1'200
1'400
1'300
1'300

Year
2016
2017
2018
2019
2020
Nominal GDP
53000
59900
65900
57000
48000
Real GDP
53000
46500
45000
36500
30000
GDP Deflator
100.00
128.82
146.44
156.16
160.00

Expert Solution

Step 1

Nominal GDP is Gross Domestic Product (GDP) less the effect of inflation. A country's real GDP is its GDP adjusted for inflation. A country's nominal GDP is represented in current year prices for goods and services, whereas real GDP is measured over a base year.

In order to calculate inflation, the GDP deflator, also known as the implicit price deflator, is utilized. It is used to determine a country's annual pricing levels for newly generated domestically manufactured final goods and services.

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