PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 5, Problem 7P
To determine
The nominal and the real
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Suppose that in the nation state of Craiglandia there are 2 final goods produced in the economy – food and clothing. Suppose the economy produces 10 units of food and 5 units of clothing in 2000 (the base year), and 10 units of food and 10 units of clothing in 2015. Further suppose the price of food was $2.00 per unit in 2000, and $3.00 per unit in 2015; whereas the price of clothing was $2.00 in 2000 and $2.00 in year 2015.
What was the nominal GDP for Craiglandia in 2015?
What was the real GDP for Craiglandia in 2015?
The GDP deflator for Craiglandia, for 2015, is _______; and it follows that Craiglandia experienced _______between 2000 and 2015.
PART I -- GDP is the most often cited measure of how our economy is doing. The U.S. Bureau of Economic Analysis reports U.S. Real GDP quarterly. Based on estimates of Q1 data, (actual Q1 data not released until April 27), how did the U.S. economy do in the first quarter?
PART II -- CPI -- an equally important economic indicator -- is reported monthly and the U.S. Department of Labor Bureau of Labor Statistics. Released recently. What did that report tell us?.
Q2: GDP is:
a) a measure of all spending in the economy on foreign and domestic goods and services.
b) the total market value of all final goods and services produced in an economy in a given year.
c) the value of all output produced within an economy.
d) made up of three components: consumption, investment, and government expenditure.
Chapter 5 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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