Question

Table: Price and Output Data Yexat astn Output $2 3 base period4 7 9 Use Table: Price and Output Data. Between years 4 and 5,_of the increase in nominal GDP was due to inflation. O none o 58% all o 92%

Answer 1

using method 1

increase in nominal GDP=(nominal GDP in year 5/nominal GDP in year 4)-1

=((7*9)/(6*6))-1

=75%

increase in output=(output in year 5/output in year 4)-1

=7/6-1

=17%

increase in nominal GDP was due to inflation=change in nominal GDP-change in ouput

=75%-17%

=58%

using method 2

increase in nominal GDP was due to inflation

=(price in year 5/price in year 4)-1

=(9/6)-1

=50%

actually answer can be 50% going by the actual change in prices, but going by the approximation method shown in the method 1, the answer is 58%.

so answer is 58% given the options

the above is answer..