a. Nominal GDP is $100, real GDP is $50, and the GDP deflator is 50. b. Nominal GDP is $100, real GDP is $50, and the GDP deflator is 200. c. Nominal GDP is $50, real GDP is $100, and the GDP deflator is 200. d. Nominal GDP is $50, real GDP is $100, and the GDP deflator is 50. Which of the following could cause nominal GDP to increase next​ This preview shows page 4 - 6 out of 21 pages. However, real GDP Gross Domestic Product (GDP) Gross domestic product (GDP) is a standard measure of a country’s economic health and an indicator of its standard of living. Also, GDP can be used to compare the productivity levels between different countries. Thus, an increase in prices also raises the nominal GDP. Do you think mother tongue  based multilingual education help in improving countrys economic situation? state the economic phenomena's mentioned? Calculating real vs nominal GDP. jets and smart phones are now relatively more expensive and ice cream is relatively, jets are now relatively less expensive and both consumption goods are relatively more, jets and smart phones are now relatively less expensive and ice cream is relatively, jets are now relatively more expensive and both consumption goods are relatively less. In addition, it’s easier to compare the growth difference between 2 countries. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> So an increase in price is doing little to gdp. %���� He will most likely go with a lower quality tv that is within the budget. a. To arrive at the Real GDP, take the country’s Nominal GDP and divide it by the calculated GDP deflator. illustrate a change in demand and a change in quantity demand  . Since nominal GDP is not adjusted for inflation, inflation can also cause it to rise. Jets, smart phones, and pizza are the only goods in the economy. B. The third one is the correct answer, but I don't like the way it is written. Nominal GDP employs current prices to value output while real GDP employs constant base-year prices to value output True A new car produced in 2009, but first sold in 2010, should be counted in 2010 GDP because that is when it was first sold as a final good View desktop site. 1. The price level rises and the quantity of final goods and services produced falls. The price level falls and the quantity of final goods and services produced falls. What do you think are some possible solutions to reducing poverty? Real GDP is a measure of output; if real GDP increases, the quantity of final goods and services produced must rise, by definition. 1 0 obj 3 0 obj This is no accident. Many things that society values, such as good health, high14. Prices of all final goods double; quantities of all final goods remain the same, Quantities of all final goods double; prices of all final goods remain the same, (iii) Prices and quantities of all final goods double. Log into your existing Transtutors account. Many things that society values, such as good health, high14. It is because 2005 has been chosen as the “base year” in this example. From definition, it’s main components are : 1. & Stimulates export, while a person only owning $600, will not buy a new tv that costs more. Nominal GDP is the value (at current prices) of all final goods and services produced in an economy in a given time period. Hinch, Paul Rudd hands out cookies to voters in the rain. Look at the data for 2010. Why doesn't the cost of stuff stay the same forever? endobj Which of the following could cause nominal GDP to increase, but real GDP to decrease? The Consumer Price Index is an average of prices of _____, and it is a _____ weight price index. Which of the following could cause nominal GDP to increase, but real GDP to decrease? Since the price index in the base year always has a value of 100 (by definition), nominal and real GDP are always the same in the base year. If the question were about Real GDP, instead of nominal GDP, this would not be the case. I am having a hard time working this one out in my head. The price level falls and the quantity of final goods and b. Get it solved from our top experts within 48hrs! This is because of inflation. B. B. If the question were about Real GDP, instead of nominal GDP, this would not be the case. x��]�o�8������C�ˢ�>Ğ��,vn��Y��`�n%6fF�q�����˪"%�-���0؝�nK�"���"}�����c��W�__����7�N�x�~������}��t;t���py����VW�_���V+���P�?�|�Uj��U�%iV��(��Q�y�"U����/_��Qg�R����ş���O�_����W�������'�-~��Q�`�ﯿ�F��Oj�����Y0�laB�Γ�5��Ic�7ܟ���qw|wv�l��m|�3�7�cM�IRʢ�VI>�:���E�&�T�%Ee ~��?�i{���W�7f^��Ye�[m��IV�tW���pClWm�hK]'ꄗ�o��7K�����4�ߤiqe���,͏EE?�y���e����k�Q}y^�gW�Z�׆>�g�u� Smart phones and pizza are consumption goods. Which of the following would cause nominal GDP to double between year 1 and, 3 out of 3 people found this document helpful. 14. A) nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83. the value of leisure, the value of goods and services produced at home, and the quality of … Which of the following would cause nominal GDP to double between year 1 and year 2? (i) Prices of all final goods double; quantities of all final goods remain the same (ii) Quantities of all final goods double; prices of all final goods remain the same (iii) Prices and quantities of all final goods double Prices of all final goods double C. The price level rises and the quantity of final goods and services produced falls. What do you think are some possible solutions to reducing poverty? <>>> The price level rises and the quantity of final goods and Output produced in a year. When you hear reports of a country’s GDP that don’t specify the type of GDP, it is likely to be nominal GDP.

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