Question
I am having trouble with this problem Aggregate Data Value (in millions of dollars) Consumption spending 1,000 Employee compensation 1,100 Government spending 400 Interest payments
I am having trouble with this problem
Aggregate Data
Value (in millions of dollars)
Consumption spending
1,000
Employee compensation
1,100
Government spending
400
Interest payments
125
Investment spending
300
Net exports
100
Profits
200
Rents
175
Savings
400
The table above shows aggregate statistical data for CountryX
in2018
. AssumetheGDP
deflator is160
.
(a) Calculate the nominalGDP
in2018
.Show your work.
(b) Explain why the income approach for calculatingGDP
yields the same value as the expenditure approach to calculatingGDP
.
(c) Explain one difference between theCPI
and theGDP
deflator.
(d) Using theGDP
deflator, calculate realGDP
for2018
.Show your work.
(e) Assume wheat farmers in CountryX
sold their entire crop of wheat to domestic wheat millers, who sold it to domestic bakeries. If the value of wheat farmers' sales is$10
million, the value of wheat millers' sales is$25
million, and the value of bakeries' sales is$65
million, by how much would CountryX
's nominalGDP
change as a result of this transaction? Explain.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started