The table below is extracted from Happy land Republic, Bureau of Statistics records for 2018-2019. Use the information in this table to answer the questions that follow.

Item

Used car sales

Factory components sales Cloth sales

Beef sales

Milk litres sales Computers sales

Printers sales

Raw materials for tractor assembling plant sales

(4 Marks) ii. Why does real GDP always defer from nominal GDP? (3 Marks)

Assessment Question Week 9 and 10: Inflation and unemployment, and Macro economics

Question 5 Marks 11

1. Use two diagrams to explain the effects of the determinants of aggregate demand on real GDP in a nation. (8 Marks)
2. Suppose there is an expectation of a rapid general price increase in goods and services in Australia in January 2021. Examine the effects of the anticipated general rapid increase in price for goods and services.
3. (3 Marks)

Base year (2015)

2016 Production

6,000 10,000 14,000

1,800 6,000 2500 400

4450 real GDP in 2016

(4 Marks) (3 Marks)

7 Marks

Production

5,000 8,000 8,000 1,500 5,000

2000 500

Price

2000.00 500.00 20.00 10.00 1.30 500.00 300.00

Price

2,500 1200.00 35.00 12.00 2.50 800.00 355.00

4500

i. Calculate Happy Land Republic's nominal GDP andreal GDP in 2016

ii. Why does real GDP always defer from nominal GDP?