Question

Year Coffee For each of the following questions, use the following table of items produced by a nation for the years 2018, 2019, and 2020. Price of Qty of Price of Qty of Price of Qty of Coffee Monitors Monitors Headphones Headphnes 2018 $1.00 100 $100 10 $50 2019 $1.50 300 $150 $75 2020 $3.00 $300 $150 3 20 800

Answer 1

Answer 9:

Nominal GDP growth rate from year 2018 to 2019 is 95 percent.

Explanation: GDP is the value of total production in a given year, i.e, price× quantity of all goods added together.

For 2018 Nominal GDP= $1×100+$100×10+$50×18=$2000.

For 2019 Nominal GDP =$1.50×300+$150×13+$75×20=$3900

Growth rate =Change in GDP/GDP in 2018 ×100 =$3900-$2000/$2000×100=95%

Answer 10:

Nominal GDP growth rate from year 2019 to 2020 is 200 percent.

Explanation: GDP is the value of total production in a given year, i.e, price× quantity of all goods added together.

For 2020 Nominal GDP= $3×800+$300×20+$150×22=$11700

For 2019 Nominal GDP =$1.50×300+$150×13+$75×20=$3900

Growth rate =Change in GDP/GDP in 2018 ×100 =$11700-$3900/$3900×100=200%.

Answer 11:

Real GDP in 2018 using 2018 as base year is same as nominal GDP in 2018,i.e., $2000.

Explanation: GDP for 2018 using 2018 as base year will use both prices and quantity for year 2018 and therefore it will be equal to Nominal GDP.

Answer 12: Real GDP for 2019 using 2018 as base year is $2600.

Explanation: Real GDP for 2019 using 2018 as base year will be calculated using quantity of year 2019 and prices for year 2018 as follows:

Real GDP= $1×300+$100×13+$50×20=$2600.