Question

In: Economics

In 1980 France had a GDP of $325 billion francs and a population of 11.78 million....

In 1980 France had a GDP of $325 billion francs and a population of 11.78 million. In 1980 the exchange rate was 1 US dollar was equal to 1.67 francs. In 2010, France had a GDP of $435 billion euros and a population of 21.75 million. In 2010 0.8 euros was equal to 1 US Dollar. The GDP deflator was 51 in 1980 and 125 in 2010. By what percentage did France’s Real GDP per capita rise between 1980 and 2010 in U.S. dollars
Identify the most commonly cited measure of inflation in the United States and explain how it is calculated. Identify and briefly discuss the some of the problems that statisticians have paid considerable attention to in recent years (your answer needs to be thorough).
Describe the relationship between inflation levels in prices and inflation levels for prices, wages and interest rates with respect to their ability to affect people's economic status and business outcomes (again, here be thorough and explain what happens when wages, etc. does and does not keep up with inflation).
Explain the differences and similarities between the GDP deflator and the CPI. Be thorough in your answer and write in complete sentences.
What is Hyperinflation and what are some reasons it may occur and persist? What is deflation, when does deflation usually occur, and is deflation a good or bad thing? Give examples of when each scenario happened in history as well. Again, be thorough in your answer.

Expert Solution

Real GDP = (Nominal GDP ÷ GDP Deflator)

GDP Deflator in 1980 = 51

GDP of France in 1980 = 55 billion euros

Real GDP of France in 1980 = (55,000,000,000 ÷ 51) × 100 = 1,078,431,372.55 euros

GDP Deflator in 1980 = 125

GDP of France in 1980 = 235 billion euros

Real GDP of France in 1980 = (235,000,000,000 ÷ 51) × 100 = 1,880,000,000.00 euros

Exchange rate in 1980: 1 US Dollar = 0.8 Euros or 1 Euro = 1.25 US Dollar

So, GDP of France in 1980 in US Dollar = 1,078,431,372.55 × 1.25

GDP of France in 1980 in US Dollar = $1,348,039,215.69

Exchange rate in 1980: 0.8 US Dollar = 1 Euros or 1 US Dollar = 1.25 Euro

So, GDP of France in 1980 in US Dollar = 1,880,000,000 ÷ 1.25

GDP of France in 1980 in US Dollar = $1,504,000,000.00

Population of France in 1980 = 10,800,000

Population of France in 2000 = 15,300,000

Real GDP per capita of France in 1980 in US Dollars = 1,348,039,215.69/10,800,000 = $124.81

Real GDP per capita of France in 2000 in US Dollars = 1,504,000,000.00/15,300,000 = $98.3

Compound Annual Growth Rate (CAGR) = (GDP in 2000 ÷ GDP in 1980)1/N-1 – 1

N = Number of Years

CAGR = (98.3 ÷ 124.81)1/20 – 1

CAGR = –1.2%

from the above questions i have answered the 1st question .

Rahul Sunny answered 1 year ago

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