Nominal total consumption is given by the equation C = PNc, where P is the price...

 

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Nominal total consumption is given by the equation C = PNc, where P is the price level, N is population, and c is real per capita consumption. Consumption-to-output ratio is given by C/Y, where Y is nominal total GDP. Suppose the average growth rate of population is 3 percent, inflation rate is 2.5 percent, and real per capita consumption growth rate is 1.5 percent. Assume also that real per capita GDP growth rate is 2 percent. 3.a. What is the growth rate of real total consumption? 3.b. What is the growth rate of nominal total consumption? 3.c. What is the growth rate of real total GDP? 3.d. What is the growth rate of consumption-to-output ratio? Nominal total consumption is given by the equation C = PNc, where P is the price level, N is population, and c is real per capita consumption. Consumption-to-output ratio is given by C/Y, where Y is nominal total GDP. Suppose the average growth rate of population is 3 percent, inflation rate is 2.5 percent, and real per capita consumption growth rate is 1.5 percent. Assume also that real per capita GDP growth rate is 2 percent. 3.a. What is the growth rate of real total consumption? 3.b. What is the growth rate of nominal total consumption? 3.c. What is the growth rate of real total GDP? 3.d. What is the growth rate of consumption-to-output ratio?

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Answer Answen given C PNC C To tal Consm pton P PAice level N Populatoni 1D Comaumption to out... View the full answer