Question: Year Quantities Produced Prices CDs Tennis Rackets $/CD $/Tennis Racket Nominal GDP Real GDP Price Index 2011 2012 100 200 $20 $110 120 210

Year Quantities Produced Prices CDs Tennis Rackets $/CD $/Tennis Racket Nominal GDP Real GDP Price Index 2011 2012 100 200 $20 $110 120 210 $22 $120 A) What is nominal GDP for year 2011? (Hint: multiply year 2011's output of CDs & tennis rackets by their respective prices in 2011) B) What is nominal GDP for year 2012? (Hint: multiply 2012's output of CDs & tennis rackets by their respective prices in 2012) c) What is the GDP deflator for the base year 2011? (Hint: The base year's price index is always equal to 100) D) If we assume year 2011 is the base year, then what is real GDP for year 2011? What is true about the base year's real & nominal GDP? [Hint: Real GDP = 2011 (nominal GDP 2011/GDP deflator 2011) X 100] E) If we assume year 2011 is the base year, then what is real GDP for the year 2012? (Hint: Multiply year 2012's output of CDs & tennis rackets by what each cost in the year 2011) F) What is the GDP deflator for the year 2012? [Hint: GDP deflator 2012 = (Nominal GDP 2012/Real GDP 2012) * 100] G) What is the rate the inflation between 2011 and 2012? Hint: Rate of inflation = [( Price index 2012 Price index 2011 )/ Price index 2011] * 100 H) Rate of real GDP growth = What is the rate of real GDP growth between 2011 and 2012? Hint: [(Real GDP 2012 Real GDP 2011)/Real GDP 2011] * 100

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