GDP Calculation 16 points Suppose that e-scooter and game console are the only two goods produced in an economy. Th following table gives the quantity of each produced (in millions) and their price in the years 2021 and 2022: Price Quantity Price Quantity e-scooter e-scooter Game Console Game console 2021 40 4 40 3 2022 60 3 30 4 a. What is the real GDP growth rate in 2022 when using 2021 price level? b. Why do you think that economists are more interested in real GDP growth rather than nominal GDP growth? c. Given your answer in part a, did the real GDP per capita increase, decrease or stay the same if the population grew at 3% between 2021 and 2022?
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For 2021: Nominal GDP_2021 = (Price_e-scooter_2021 * Quantity_e-scooter_2021) + (Price_Game_Console_2021 * Quantity_Game_Console_2021) Nominal GDP_2021 = (40 * 4) + (4 * 3) = 160 + 12 = 172 million For 2022: Nominal GDP_2022 = (Price_e-scooter_2022 * Show more…
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Crystal W.
answer a) (1 point) Calculate the nominal GDP for 2019. (b) (2 points) Find (X) (c) (4 points) Calculate the real GDP for each year. (d) (4 points) A journalist commented ‐ Nominal GDP has decreased; the economy is shrinking. ‐ Is this analysis legitimate? Explain and provide a supporting evidence and counterargument. (e) (4 points) Find the GDP deflator of each year. Then, calculate the inflation rate. (f) (4 points) In 2019, both apples and tomatoes farms reported that they paid the rents of farm machinery (capital) for a combined amount of $400,000 ‐ in nominal dollars. Assume that they earned zero profits, and did not owe any loans; thus, paid no interest. In nominal dollars, how much of the output was due to labor work in 2019?
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