The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions of 2007 dollars), and population (in thousands) of Canada in 1966, 1976, 1986, 1996, 2006, and 2016. The Canadian price level rose consistently over the period 1966€“2016.

a. Why is real GDP greater than nominal GDP for all years until 2006 and lower for 2016?

b. Calculate the percent change in real GDP from 1966 to 1976, 1976 to 1986, 1986 to 1996, 1996 to 2006, and 2006 to 2016. Which period had the highest growth rate?

c. Calculate real GDP per capita for each of the years in the table.

d. Calculate the percent change in real GDP per capita from 1966 to 1976, 1976 to 1986, 1986 to 1996, 1996 to 2006, and 2006 to 2016. Which period had the highest growth rate?

e. How do the percent change in real GDP and the percent change in real GDP per capita compare? Which is larger? Do we expect them to have this relationship?

Transcribed Image Text:

Nominal GDP Real GDP (billions of dollars) (billions of 2007 dollars) Population (thousands) Year $64.8 $431.9 1966 19 998 658.0 1976 200.0 23 414 1986 524.5 897.0 26 067 1996 857.0 1,104.3 29 570 2006 1,492.2 1,541.7 32 529 2016 2,027.5 1,796.2 36 229