Suppose both nominal GDP rises by 10 percent and real GDP rises by 2 percent. What has happened to the general price level? What is the inflation rate? Show your calculation.
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Step 1:** Calculate the GDP deflator at time zero: GDP deflator = Nominal GDP / Real GDP = 1 / 1 = 100% ** Show more…
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If nominal GDP is $10 trillion and real GDP is $8 trillion, then the GDP deflator is Group of answer choices 125, and this indicates that the price level has increased by 125 percent since the base year. 125, and this indicates that the price level has increased by 25 percent since the base year. 80, and this indicates that the price level has decreased by 20 percent since the base year. 80, and this indicates that the price level has increased by 80 percent since the base year.
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If the nominal GDP is $20 trillion, what is the real GDP if the current CPI is 104?
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Use the data in the following table to calculate the GDP deflator for each year (values are in billions of dollars): $$\begin{array}{|c|c|c|}\hline {\text { Year }} & {\text { Nominal GDP }} &\text { Real GDP } \\ \hline 2010 & {\$ 14,964} & {\$ 14,784} \\ \hline 2011 & {15,518} & {15,021} \\ \hline 2012 & {16,163} & {15,369} \\ \hline 2012 & {16,768} & {15,710} \\ \hline 2014 & {16,245} & {16,086} \\ \hline\end{array}$$ Which year from 2011 to 2014 saw the largest percentage increase in the price level, as measured by changes in the GDP deflator? Briefly explain.
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