## Macro Module 1 Implicit price deflator practice exam questions

 Author Message NEAS Supreme Being Group: Administrators Posts: 4.3K, Visits: 1.3K Macro Module 1 Implicit price deflator practice exam questions(The attached PDF file has better formatting.)A country makes goods Y and Z in Years 1 and 2 at the quantities and prices shown below. The implicit price deflator in Year 1 is 137.    Year 1    Year 2    Y    Z    Y    ZQuantity    55    151    77    130Price    120    28    152    89Use the chain-link method for the base prices.Question 1.2: Nominal GDPWhat is the nominal GDP in Year 1 and in Year 2?●    Year 1: 55 × 120 + 151 × 28 = 10,828●    Year 2: 77 × 152 + 130 × 89 = 23,274Question 1.3: Base pricesWhat are the base prices for Good Y and for Good Z?●    Good Y: (120 + 152) / 2 = 136.00●    Good Z: (28 + 89) / 2 = 58.50Question 1.4: GDP at base pricesWhat is the GDP in Year 1 and in Year 2 at the base prices?●    Year 1: 55 × 136 + 151 × 58.50 = 16,313.50●    Year 2: 77 × 136 + 130 × 58.50 = 18,077.00Question 1.5: Ratio of GDP in Year 2 to Year 1What is the ratio real GDP in Year 2 to real GDP in Year 1?Answer 1.5: 18,077.00 / 16,313.50 = 1.1081Question 1.6: Real GDPWhat is Real GDP in Year 1?Answer 1.6: 10,828 / (137 / 100) = 7,903.65Question 1.7: Real GDPWhat is Real GDP in Year 2?Answer 1.7: 7,903.65 × 1.1081 = 8,758.03Question 1.8: Implicit price deflatorWhat is the implicit price deflator in Year 2?Answer 1.8: 100 × 23,274 / 8,758.03 = 265.74 Attachments Macro Module 1 Implicit price deflator practice exam questions.pdf (308 views, 26.00 KB)
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