GDP Practice Exercises Suppose GDP is made up

Suppose GDP is made up of just one product, cups of Latte. The table

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table

Use the information in the table below to answer the following questions. Year Country

9. a. Was constant 10. d. 113 11. Nominal GDP was $3774 billion in

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GDP Practice Exercises

Suppose GDP is made up of just one product, cups of Latte. The table below shows how many lattes have been made in a four year period. You will need to calculate a price index in order to calculate real GDP. Use 2000 as the base year 2000 2001 2002 2003 # of Lattes 1, 000 1, 200 1, 800 1, 600 Price per Nominal cup GDP $2 $2, 000 $3 $3, 600 $4 $7, 200 $5 $8, 000 Price Index Nominal GDP = Output x price 1, 000 1, 200 1, 800 1, 600 x x $2 $3 $4 $5 = = $2, 000 $3, 600 $7, 200 $8, 000 Real GDP

Suppose GDP is made up of just one product, cups of Latte. The table below shows how many lattes have been made in a four year period. You will need to calculate a price index in order to calculate real GDP. Use 2000 as the base year 2000 2001 2002 2003 # of Lattes 1, 000 1, 200 1, 800 1, 600 Price per Nominal cup GDP $2 $2, 000 $3 $3, 600 $4 $7, 200 $5 $8, 000 Price Index Current year cost of goods X 100 Price Index = base year cost of goods Real GDP

Suppose GDP is made up of just one product, cups of Latte. The table below shows how many lattes have been made in a four year period. You will need to calculate a price index in order to calculate real GDP. Use 2000 as the base year 2000 2001 2002 2003 # of Lattes 1, 000 1, 200 1, 800 1, 600 Price per Nominal cup GDP $2 $2, 000 $3 $3, 600 $4 $7, 200 $5 $8, 000 Price Index 100 150 200 250 Current year cost of goods X 100 Price Index = base year cost of goods 2 2 X 100 200 = 4 X 100 2 150 = 3 X 100 2 250 = 5 X 100 2 100 = Real GDP

Suppose GDP is made up of just one product, cups of Latte. The table below shows how many lattes have been made in a four year period. You will need to calculate a price index in order to calculate real GDP. Use 2000 as the base year 2000 2001 2002 2003 # of Lattes 1, 000 1, 200 1, 800 1, 600 Real GDP = Price per Nominal cup GDP $2 $2, 000 $3 $3, 600 $4 $7, 200 $5 $8, 000 nominal GDP price index in hundredths Price Index 100 150 200 250 Real GDP

Suppose GDP is made up of just one product, cups of Latte. The table below shows how many lattes have been made in a four year period. You will need to calculate a price index in order to calculate real GDP. Use 2000 as the base year 2000 2001 2002 2003 # of Lattes 1, 000 1, 200 1, 800 1, 600 Real GDP = Price per Nominal cup GDP $2 $2, 000 $3 $3, 600 $4 $7, 200 $5 $8, 000 nominal GDP price index in hundredths 2, 000 1 3, 600 = 2, 400 = 3, 600 1. 5 3, 200 = 2000 = 7, 200 2 8, 000 2. 5 Price Index 100 150 200 250 Real GDP 2, 000 2, 400 3, 600 3, 200

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 Price $15 16 17 Quantity 2 2 3 1. What is the percent change in computer production from 2008 to 2009? % change = year 2 - year 1 X 100 year 1

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 Price $15 16 17 Quantity 2 2 3 2. What is the percent change in price of pizza from 2009 to 2010? % change = year 2 - year 1 X 100 year 1

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 Price $15 16 17 Quantity 2 2 3 2. What is the percent change in price of pizza from 2009 to 2010? % change = year 2 - year 1 X 100 year 1 6. 25%= 17 - 16 X 100 16

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 3. Calculate nominal GDP in Narvaizland for 2008. Nominal GDP = out put x price Price $15 16 17 Quantity 2 2 3

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 3. Calculate nominal GDP in Narvaizland for 2008. Nominal GDP = out put x price ($900 x 10) + ($10 x 100) + ($15 x 2) = 900 0 + 1, 000 + 30 = 10, 030 Price $15 16 17 Quantity 2 2 3

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 Price $15 16 17 Quantity 2 2 3 4. Calculate real GDP in Narvaizland for 2008 using 2008 as the base year. _____Nominal GDP_____ Real GDP = Price index in hundredths

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 Price $15 16 17 4. Calculate real GDP in Narvaizland for 2008 using 2008 as the base year. _____Nominal GDP_____ Real GDP = Price index in hundredths 1030 = 1030 1 In the base year Real GDP = Nominal GDP Quantity 2 2 3

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 5. Calculate nominal GDP in Narvaizland for 2010. Nominal GDP = out put x price ($1, 050 x 12) + ($14 x 110) + ($17 x 3) = 12, 600 + 1, 540 + 51 = 14, 191 Price $15 16 17 Quantity 2 2 3

The economy of Narvaizland produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2008, 2009, and 2010. COMPUTERS DVD’s PIZZA Year 2008 2009 2010 Price $900 1, 050 Quantity 10 10. 5 12 Price $10 $12 $14 Quantity 100 105 110 Price $15 16 17 Quantity 2 2 3 6. Calculate real GDP in Narvaizland for 2010 using 2008 as the base year. Real GDP = out put in specific year x price in base year ($900 x 12) + ($10 x 110) + ($15 x 3) = 10, 800 + 1, 100 + 45 = 11, 945

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 1. Calculate the percent increase in nominal GDP between 2005 and 2010 from Country A. % change = year 2 - year 1 X 100 year 1 100% = 4, 000 - 2, 000 X 100

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 2. Calculate the percent increase in nominal GDP between 2005 and 2010 from Country B. % change = year 2 - year 1 X 100 200% = 6, 000 - 2, 000 X 100

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 3. Calculate real GDP for Country A in 2010 using 2005 as the base year. Price index= Current year cost X 100 base year cost 100= 100 X 100

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 3. Calculate real GDP for Country A in 2010 using 2005 as the base year. Price index= 100 Real GDP = ____Nominal GDP______ Price index in hundredths $4, 000 = 4, 000 1

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 4. Calculate real GDP for Country B in 2010 using 2005 as the base year. Price index= Current year cost X 100 base year cost 200= 200 100 X 100

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 4. Calculate real GDP for Country B in 2010 using 2005 as the base year. Price index= 200 Real GDP = ____Nominal GDP______ Price index in hundredths $3, 000 = 6, 000 2

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 5. What is the percent increase in real GDP for Country A between 2005 and 2010? % change = year 2 - year 1 100% = 4, 000 - 2, 000 X 100

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 6. What is the percent increase in real GDP for Country B between 2005 and 2010? % change = year 2 - year 1 50% = 3, 000 – 2, 000 X 100

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 7. What is the real GDP per capita for Country A in 2010 using 2005 as the base year GDP per capita= $4, 000 20 = 200

Use the information in the table below to answer the following questions. Year Country A 2005 2010 Country B 2005 2010 Nominal GDP Price Level Population $2, 000 4, 000 $100 10 20 2, 000 6, 000 $100 200 10 15 8. What is the real GDP per capita for Country B in 2010 using 2005 as the base year GDP per capita= $3, 000 15 = 200

9. a. Was constant 10. d. 113 11. Nominal GDP was $3774 billion in year 1 and the GDP deflator was 108. Nominal GDP was $3989 in year 2 and GDP deflator that year was 112. What was the real GDP in years 1 and 2 respectively? 3774 1. 08 = 3, 494 in year 1 3989 = 3, 561 in year 2 1. 12 12. Nominal GDP is less than real GDP in an economy in year 1. In year 2, nominal GDP is equal to real GDP. In year 3, nominal GDP is slightly greater than real GDP. In year 4, nominal GDP is significantly great than real GDP. Which year is most likely to be the base year that is being used to calculate the price index for the economy? Year 2