The following table shows some data for an economy that produces only 2 goods: bread and butter. Year 2010 2011 2012 Bread Price 1 2 2 Quantity 150 150 300 Butter Price 2 4 4 Quantity 100 100 200 a. Using 2010 as the base year, compute the nominal GDP, real GDP and GDP deflator for each of the 3 years. b. Compute the percentage change in real GDP and nominal GDP in 2011 and 2012 from the preceding year (2010 and 2011 respectively). Which year shows that economic well-being truly increased? Why? c. Compute the inflation rate in 2012.
The following table shows some data for an economy that produces only 2 goods: bread and butter. Year 2010 2011 2012 Bread Price 1 2 2 Quantity 150 150 300 Butter Price 2 4 4 Quantity 100 100 200 a. Using 2010 as the base year, compute the nominal GDP, real GDP and GDP deflator for each of the 3 years. b. Compute the percentage change in real GDP and nominal GDP in 2011 and 2012 from the preceding year (2010 and 2011 respectively). Which year shows that economic well-being truly increased? Why? c. Compute the inflation rate in 2012.
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter23: Measuring A Nation's Income
Section: Chapter Questions
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Transcribed Image Text:9. The following table shows some data for an economy that produces only 2 goods: bread
and butter.
Year
2010
2011
2012
Bread
Price
1
2
2
Quantity
150
150
300
Butter
Price
2
4
4
Quantity
100
100
200
a. Using 2010 as the base year, compute the nominal GDP, real GDP and GDP deflator
for each of the 3 years.
b. Compute the percentage change in real GDP and nominal GDP in 2011 and 2012
from the preceding year (2010 and 2011 respectively). Which year shows that
economic well-being truly increased? Why?
c. Compute the inflation rate in 2012.
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