Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1. Country A produces PC (final good) and CPU (intermediate good) and imports ramen. The table below shows prices and production levels of PC
1. Country A produces PC (final good) and CPU (intermediate good) and imports ramen. The table below shows prices and production levels of PC and CPU and prices of banana in two years. The consumption basket of the typical consumer in A consists of one PC and 4 ramen. Year I is the base year. If you need to round your answer, round it off to two decimal places. P of PC Q of PC Pof CPU Year 1 100 50 20 Year 2 120 40 30 1.a. Calculate A's nominal GDP and Real GDP in year 2 Nominal GDP: Real GDP: 1.b. Calculate GDP deflator and the inflation rate in year 2. GDP deflator Inflation rate Qof CPU Pof Ramen 60 1 GO Lc. Calculate the costs of the consumption basket in year 1 and Year 1 Year 2 1.d. Calculate CPI and the inflation rate in year 2. CPE Inflation rate: 4 your 2. y Le. In year 3, the price of CPU fell and the price of ramen rose. Answer how the GDP deflator and CPI would change in year 3 Decrease, Increase or No change. GDP deflator CPI:
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