Question
A particular country produced three goods (books, chairs, and hats), in 2012 and 2013, with prices and quantities shown in the table below. The overall
A particular country produced three goods (books, chairs, and hats), in 2012 and 2013, with prices and quantities shown in the table below. The overall price level (as measured by, e.g., the Consumer Price Index) was 55 in 2012 and 59 in 2013.
1.) Calculate this country's real GDP (using 2013 as the base year) for each year. What was the GDP growth rate over this period (you may round your answer to the nearest tenth of a percent)?
2.) Calculate the inflation rate over this period (round to the nearest tenth of a percent). For loans made in 2012 and repaid in 2013 at a nominal interest rate of 20%, what was the real interest rate?
3.) In 2013, this country's population consisted of 800 people. 310 of these people were members of the armed forces, in prisons, mental institutions, or nursing homes, or younger than 16, and another 60 people did not want to work. If 390 people were employed in this country in 2013, what was the unemployment rate (round to the nearest tenth of a percent)?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started