5.1 The table below shows the Gross Domestic Product (GDP) of a hypothetical economy for the years 2002 and 2014. Use 2002 as the base year and answer the questions below:
Average Price in Rands Quantity Sold
Year 2002 2014 2022 2014
Food 12 16 4 5
Housing 9 13 3 3
Fun 4 7 3 4
Machines 20 22 2 2
5.1.1 Calculate the nominal GDP for this economy in the year 2002. [2]
Nominal GDP = (12 × 4) + (9 × 3) + (4 × 3) + (20 × 2) = 127
5.1.2 Calculate the real GDP for this economy in the year 2014. [2]
Real GDP = (5 × 12) + (3 × 9) + (4 × 4) + (2 × 20) = 143.
5.1.3 What is the percentage change in real GDP from year 2002 to 2014? Is it a growth or decline in real GDP? [2]
Percentage Change in Real GDP = (143 – 127 / 127) × 100 = 12.60%
This indicates a growth in the GDP of 12, 6 %
5.2 Consider the rand/dollar exchange rate and focus on the market for dollars. Make use of supply and demand curves and determine whether the dollar would appreciate / depreciate against the rand if more foreign tourists were to visit South Africa. [4]