3. Consider an economy that produces only three types of goods: computers, oranges, and opera tickets. Below are the data on production and prices for 2021 (the base year) and 2022: Goods Computers Oranges Opera 2021 Q 3 units 200 units 1,000 tickets 2022 Q P $500per unit $0.5 per unit 4 units 200 units $60 per ticket 900 tickets P $400 per unit $0.5 per unit $70 per ticket (a) Find nominal GDP in 2021 and in 2022. What is the percentage increase in nominal GDP from 2021 to 2022? (b) Assuming that 2021 is the base year, calculate real GDP in 2021 and in 2022. Does real GDP increase between these two years? (c) Compute the chain-weighted real GDP growth rate. (d) Find the GDP deflator for 2022. By what percentage does the price level change from the base year to 2022? (e) Assuming that the consumption basket used to calculate the CPI consists of 2 computers, 100 oranges, and 800 opera tickets, use the CPI to calculate the rate of inflation between 2021 and 2022.

3. Consider an economy that produces only three types of goods: computers, oranges, and opera tickets. Below are the data on production and prices for 2021 (the base year) and 2022: Goods Computers Oranges Opera 2021 Q 3 units 200 units 1,000 tickets 2022 Q P $500per unit $0.5 per unit 4 units 200 units $60 per ticket 900 tickets P $400 per unit $0.5 per unit $70 per ticket (a) Find nominal GDP in 2021 and in 2022. What is the percentage increase in nominal GDP from 2021 to 2022? (b) Assuming that 2021 is the base year, calculate real GDP in 2021 and in 2022. Does real GDP increase between these two years? (c) Compute the chain-weighted real GDP growth rate. (d) Find the GDP deflator for 2022. By what percentage does the price level change from the base year to 2022? (e) Assuming that the consumption basket used to calculate the CPI consists of 2 computers, 100 oranges, and 800 opera tickets, use the CPI to calculate the rate of inflation between 2021 and 2022.

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Measuring The Cost Of Living

Section: Chapter Questions

Problem 3PA

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