Chapter 7 discussion question

Chapter 7 discussion question – article writing cafe

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Suppose an economy produces only one good. In the base year, production was 8 units at a price of $10 each. The next year, production increased to 9 units and the price of the good increased to $12.

Find nominal GDP in years 1 and 2.

If the price index is 100 in the base year, what is the value of the price index in year 2?

Find real GDP in year 2.
Suppose a hypothetical national economy can be represented by the following data:

Year

Nominal GDP

Price Index (2000 = 100)

Real GDP

2009

$1536

128

2010

$1663

132

2011

135

$1274

2012

$1792

140

Find real GDP in years 2009, 2010, and 2012.

Find nominal GDP in year 2011.

Discuss what may cause the change in GDP from year to year use your textbook chapter 7. Discuss in detail and use examples to support your argument. 
Part C–200 word required reply and a reply to at least one classmate for full credit