An economy produces only food and fun. Using the following table that shows the quantities produced and prices in 2010 and 2011

a) Calculate nominal GDP in 2010 and nominal GDP in 2011.

b) Calculate the value of 2011 production in 2010 prices and the percentage increase in production when valued at 2010 prices.

c) Calculate the value of 2010 production in 2011 prices and the percentage increase in production when valued at 2011 prices.

d) Using the chained-dollar method, calculate real GDP in 2010 and 2011 if the base year is 2011. in terms of what dollars is each of these two real GDPS measured?

e) The base year is 2011. Using the chained-dollar method, compare the growth rates of nominal GDP and real GDP in 2011.

f) The base year is 2010. use the chained-dollar method to calculate real GDP in 2010 and 2011. In terms of what dollars is each of these two real GDPS measured?

g) Compare the growth rates of nominal GDP and real GDP in 2010 dollars in 2011

Transcribed Image Text:

Item Quantity Price 2010 Food 100 $2 Fun 50 $6 Item Quantity Price Food 50 $6 2011 Fun 65 $10 Item Quantity Price 2010 Food 100 $2 Fun 50 $6 Item Quantity Price Food 50 $6 2011 Fun 65 $10

Answer rating: 100% (QA)

a Calculating GDP 2010 100 x 2 50 x 6 500 2011 50 x6 65 x 10 950 So Total GDP 500950 1450 b Percenta... View the full answer