Question
GDP Deflator and Real GDP (12 marks) a) Use the following table to calculate GDP price deflator in 2020 and 2021 and the change in
GDP Deflator and Real GDP (12 marks)
a) Use the following table to calculate GDP price deflator in 2020 and 2021 and the change in overall price level from 2020 to 2021. You will need to round your answer to the nearest whole number. (8 marks)
GDP | 2020 | 2021 |
|---|---|---|
Nominal GDP | $52 000 | $56 000 |
Real GDP | $42 000 | $44 000 |
b) Consider an economy only producing two goods: apple and orange in both Year 1 and Year 2. Canthe Real GDP of this economy increase between Year 1 and Year 2, while the Nominal GDP decreasesor remains the same? Explain your answer with a numerical example. (4 marks)
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Intermediate Accounting
Authors: kieso, weygandt and warfield.
IFRS Edition
978-1118443965, 1118800532, 9781118800539, 978-0470873991
