Business, 06.03.2020 11:36 kinz5550

Below are some data from the land of milk and honey.

Year Price of Milk Quantity of Milk Price of Honey Quantity of Honey

2016 $1 100 quarts $2 50 quarts

2017 1 200 2 100

2018 2 200 4 100

a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2016 as the base year.

b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2017 and 2018.

Answers: 3

Show answers

Answers

Answer from: ciaotaylor

The solution to the given problem is done below.

Explanation:

a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2016 as the base year.

Nominal GDP is simply equal to the sum of the current year price * current year quantity of all the goods.

2016: ($1 per qt. of milk X 100 qts. milk) + ($2 per qt. of honey X 50 qts. honey) = $200

2017: ($1 per qt. of milk X 200 qts. milk) + ($2 per qt. of honey X 100 qts. honey) = $400

2018: ($2 per qt. of milk X 200 qts. milk) + ($4 per qt. of honey X 100 qts. honey) = $800

Calculating real GDP (base year 2016):

Real GDP is equal to the sum of the base year price * current year quantity of all the goods.

Calculating real GDP (base year 2016):

2016: ($1 per qt. of milk X 100 qts. milk) + ($2 per qt. of honey X 50 qts. honey) = $200

2017: ($1 per qt. of milk X 200 qts. milk) + ($2 per qt. of honey X 100 qts. honey) = $400

2018: ($1 per qt. of milk X 200 qts. milk) + ($2 per qt. of honey X 100 qts. honey) = $400

b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2017 and 2018.

Percentage change in nominal GDP in 2017 = [($400 –$200)/$200] X 100% = 100%.

Percentage change in nominal GDP in 2018 = [($800 –$400)/$400] X 100% = 100%.

Percentage change in real GDP in 2017 = [($400 –$200)/$200] X 100% = 100%.

Percentage change in real GDP in 2018 = [($400 –$400)/$400] X 100% = 0%.

The GDP deflator is equal to (Nominal GDP / Real GDP)*100

Percentage change in the GDP deflator in 2017 = [(100 –100)/100] X 100% = 0%.

Percentage change in the GDP deflator in 2018 = [(200 –100)/100] X 100% = 100%.

Prices did not change from 2016 to 2017. Thus, the percentage change in the GDP deflator is zero. Likewise, output levels did not change from 2017 to 2018. This means that the percentage change in real GDP is zero.

Answer from: Quest

the answer is a. $209,000

Answer from: Quest

answer/// sequence of operations that requires the longest time for completion';

Another question on Business

Business, 21.06.2019 21:30

Daniel owns 100 shares of abc corporation's common stock. abc uses the fair value option, and recent declines in the firm's credit rating have caused the value of the firm's outstanding bonds payable to drop by 10%. daniel feels this is good news, but he wants to know what you think about the situation. which of the following represents your best response? a : "this situation may be positive for you in that the change in abc's credit standing indicates that the value of the firm's assets is likely increasing. however, the drop in bond value may negate any positive effects on your bottom line, because it means your claim on the firm's assets is simultaneously decreasing." b : "actually, this is bad news all around. the drop in the value of abc's bonds payable means shareholders' claims on the firm's assets have decreased. moreover, abc's declining credit rating means that the firm's assets are probably also dropping in value, thus magnifying your losses even more." c : "on the surface, this seems like good news because it means your claim on the firm's assets has increased. however, the drop in creditworthiness may also indicate that abc's assets are declining in value, thus offsetting any gains associated with the drop in bonds payable." d : "you're right! this is good news because it means that abc's debtholders have a decreased claim on the firm's assets. as a result, the firm's existing shareholders"like you"have seen their claim on the firm's assets increase."

Answers: 2

Answer

Business, 22.06.2019 22:10

Consider the labor market for computer programmers. during the late 1990s, the value of the marginal product of all computer programmers increased dramatically. holding all else equal, what effect did this process have on the labor market for computer programmers? the equilibrium wagea. increased, and the equilibrium quantity of labor decreased. b. decreased, and the equilibrium quantity of labor increased. c. increased, and the equilibrium quantity of labor increased. d. decreased, and the equilibrium quantity of labor decreased.

Answers: 3

Answer

Business, 23.06.2019 00:00

Match each economic concept with the scenarios that illustrates it

Answers: 2

Answer

Business, 23.06.2019 00:50

Mr. drucker uses a periodic review system to manage the inventory in his dry goods store. he likes to maintain 15 sacks of sugar on his shelves based on the annual demand figure of 225 sacks. it costs $2 to place an order for sugar and costs $1 to hold a sack in inventory for a year. mr. drucker checks inventory one day and notes that he is down to 9 sacks; how much should he order?

Answers: 1

Answer

You know the right answer?

Below are some data from the land of milk and honey.

Year Price of Milk Quantity of Mil...

Questions