Question

In: Economics

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction....

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction. Calculate nominal GDP, real GDP, the Implicit price deflator, and inflation rate and fill in the corresponding columns in the following table:

Year

Price of Maple Syrup

Price of Trips

Quantity of Maple Syrup

Number of Trips

Nominal GDP

Real GDP

Implicit price deflator

Inflation

1

$11

$250

300

425

NA

2

$13

$258

310

570


3

$12

$260

324

550


4

$14

$262

410

580



No this question do not have any base year

Solutions

Expert Solution

Please give ratings it will be appreciable thank you

In this question we can assume year 1 is base year

Nominal GDP =current year price of of maple syrup*current year quantity of maple syrup + current year price of trips *current year quantity  of trips

Real GDP =base year price of of maple syrup*current year quantity of maple syrup + base year price of trips *current year quantity  of trips

deflator = (nominal GDP *100)/ real GDP

inflation = change in deflator  

year 1 year 2 year 3 year 4
price quantity price quantity price quantity price quantity
Maple syrup 11 300 13 310 12 324 14 410
Trips 250 425 225 570 260 550 262 580
nominal GDP 109550 132280 146888 157700
real GDP 109550 145910 141064 149510
Price deflator 100 90.7 104.1 105.5
inflation NA -9.3 4.1 5.5

Rahul Sunny answered 2 years ago
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