Question
Question 5: GDP Deflator and Real GDP (a) Use the following table to calculate GDP price deflator in 2019 and 2020 and the change in
Question 5: GDP Deflator and Real GDP
(a) Use the following table to calculate GDP price deflator in 2019 and 2020 and the change in the overallprice level from 2019 to 2020. You will need to round your answer to the nearest whole number. (8marks)
| GDP | 2019 | 2020 |
|---|---|---|
| Nominal GDP | $26 000 | $28 000 |
| Real GDP | $21 000 | $22 000 |
(b) Consider an economy only producing two goods: pen and bread 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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Cost Management Measuring Monitoring And Motivating Performance
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook
2nd Canadian Edition
9781118168875
