Q. 1. A. To calculate nominal, real, and GDP deflator, the following equations were used. Nominal (NGDP = Quantity (year) X Price (year), while real GDP) can be expressed as (RGDP = Nominal / Deflator), and GDP deflator can be expressed as (GDPD = Nominal / Real GDP X 100%). Therefore; (See Table 1.) B. For multiple items, calculating CPI requires a weighed average of the commodity price. In this sense, the prices of listed items were calculated as (Average = Bread price +TV Sets + etc. / 5) for each year. After which, the CPI was calculated using the equation (CPI of Multi ...
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In order to calculate the real GDP for 2001 we can use the GDP deflator formula, because deflator and nominal GDP for 2001 are given.
GDPreal2001=GDPnominal2001*100GDP deflator2001=10128*100102.4≈9890.6
The real GDP for 2002 can be calculated using GDP growth rate:
GDP growth ratet=GDPt-GDPt-1GDPt-1*100% 1.6%= GDPreal2002-9890.69890.6*100 → GDPreal2002≈10048.8
The formula for calculating the growth rate of GDP used in (a) is applicable here:
GDP growth rate=GDPt-GDPt-1GDPt-1*100% GDPnominal2002 growth= 10469.6-1012810128*100%≈3.4% GDPnominal2004 growth= 11734.3-10971.210971.2*100%≈3.4% GDPreal2001 growth= 9890.6-98179817*100%≈0.7% GDPreal2003 growth= 10320.6-10048.810048.8*100%≈2.7% Nominal GDP for a specific year measures the value of produced goods during that year and in that year’s prices. In contrast, real GDP measures the value of the output using base year prices, which ...
Expected U.S. GDP Growth Rate Going Forward
Interpreting GDP
The Gross Domestic Product (GDP) covers the money value of all services and goods, evaluated at their respective market prices, produced within the US economy. However, GDP excludes the money value of all unpaid work within the economy. Examples of unpaid work include reproductive labor such as home caring. Calculation of GDP is done by summing up all value-added at every production stage while at the same time deducting the cost of inputs incurred.
GDP takes several forms that include real GDP, nominal GDP, GDP deflator, and GDP per capita. Real GDP refers to the value of ...
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