An economy produces three goods: cars, computers, and oranges. Quantities and prices per unit for years 2009 and 2010 are given as follows:

Required:

(a) What is nominal GDP in 2009 and in 2010? By from 2009 to 2010? By what percentage does nominal GDP change from 2009 to 2010?

(b) Using the prices for 2009 as the set of common prices, what is real GDP in 2009 and in 2009? By what percentage does real GDP change from 2009 to 2010?

(c) Using the prices for 2010 as the set of common prices, what is real GDP in 2009 and in 2010? By what percentage does real GDP change from 2009 to 2010?

(d) Why are the two output growth rates constructed in (b) and (c) different? Which one is correct? Explain your answer.

Transcribed Image Text:

2009 Quantitity-- 2009 Prices-- 2010 Quantitity-- 2010 Price -- Cars cars -10.. cars- $2000.. cars- 12.. Cars- $3000 Computers Computers-4.. Computers- $1000.. Computers- 6.. Computers- $500 Oranges Oranges-1000.. Oranges- $1.. Oranges- 1000.. Oranges - $1 2009 Quantitity-- 2009 Prices-- 2010 Quantitity-- 2010 Price -- Cars cars -10.. cars- $2000.. cars- 12.. Cars- $3000 Computers Computers-4.. Computers- $1000.. Computers- 6.. Computers- $500 Oranges Oranges-1000.. Oranges- $1.. Oranges- 1000.. Oranges - $1

Answer rating: 100% (QA)

a NGDP 2009 Can price 2009 Can quantity 2009 Computen price 2009 Conputen quantity 2009 Orange price ... View the full answer