Question

In: Economics

1. Microsoft sold 300 copies of a word document in the month of April for $10/copy,...

1. Microsoft sold 300 copies of a word document in the month of April for $10/copy, 200 copies of PowerPoint for $25/copy, and 140 copies of excel for $30/copy. In the month of May, they sold 200 copies of a word document for $15/copy, 150 copies of PowerPoint for $30/copy, and 150 copies of excel for $40/copy. What is the GDP deflator index for the month of April based on the April pricings? (our answer should only be a number ex. 15000) *

2 points

50

95

100

115

2. Microsoft sold 300 copies of a word document in the month of April for $10/copy, 200 copies of PowerPoint for $25/copy, and 140 copies of excel for $30/copy. In the month of May, they sold 200 copies of a word document for $15/copy, 150 copies of PowerPoint for $30/copy, and 150 copies of excel for $40/copy. What is the real GDP for the month of May using April costs? (our answer should only be a number ex. 15000) *

Expert Solution

Q1. Base month for GDP calculation = April

In the base month, the Nominal GDP = Real GDP

GDP Deflator in the base month = (Nominal GDP/Real GDP) * 100 = 100

Ans: 100

Q2. In May:

Quantity of word document = 200 copies

Quantity of PowerPoint = 150 copies

Quantity of Excel = 150

In April:

Cost of word document = $10

Cost of PowerPoint = $25

Cost of excel = $30

Real GDP for the month of May using April costs = Cost of word document in April * Quantity of word document in May + Cost of PowerPoint in April * Quantity of PowerPoint in May + Cost of excel in APril * Quantity of excel in May = $10 * 200 + $25 * 150 + $30 * 150 = $10,250

Ans: $10,250

Rahul Sunny answered 2 years ago

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