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Problem No. 2 From following date compute (i) Real GDP (ii) GDP deflator (iii) inflation rate Year Nominal GDP Rs. billion CPI 2018-19 54195 228.1 2020-21 61583 251.3
(i) Real GDP in 2020-21 is:Yr = 61583×228.1/251.3 = 55897.66. (ii) GDP deflator is: Deflator = 61583/55897.66×100 = 110.17.(iii) Inflation rate is 110.17 - 100 = 10.17%.
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5. Assume that the velocity of money is constant. Real GDP grows by 5% per year and the money stock grows by 14% per year. If the nominal interest rate is 11% what is the real interest rate?
Real interest rate = %GDP %nominal rate / %money stock = 5% 11% / 14% = 3.92%
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Contrast the nominal GDP and real GDP. Why do economists consider real gdp as a more reliable measure for comparing changes in the production level over a series of years?
Nominal GDP is the total gross national product evaluated at current market prices. Real GDP is gross national product calculated using the prices of a selected base period . Economists...
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1. How is the Real exchange rate of seven years calculated?
2. How is the nominal and real effective exchange rate index calculated?
3. how is the nominal exchange rate of seven years calculated?
1. The Real exchange rate of seven years is nominal exchange rate multiplied by the change in price level. 2. Effective exchange rate of currency j = Normalized exchange rate...
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nominal gdp when real gdp is 2,500 and gdp deflator is 140
Nominal GDP=real GDP*deflator/1002500*140/100=3500Nominal GDP=3500
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define
1. GDP
2. GNP
3. NI
4. Nominal GDP
5. Real GDP
6. Consumer price index
1. GDP (Gross Domestic Product) is the total value of all goods and services produced within a country in a financial year.2. GNP (Gross National Product) is the total value of finished...
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how gross national product (GNI) can be derived from gross domestic product (GDP).
Solution:GDP refers to the total value of all final goods and services produced in an economy, within a nation’s borders. GNP on the other hand, refers to the total value...
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Briefly explain the meaning of gross domestic product (GDP) and gross national product (GNP). Decide and explain either GDP or GNP is better to measure the economic performance of the country.
The main difference between GDP and GNP is that GNP considers the output of a country’s citizens regardless of where that economic activity occurred. GDP considers the activity within a...
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Depreciation cause? 1.Net investment = gross investment 2.Net investment > gross investment 3.Net investment < gross investment 4.Net investment = 0
.Net investment < gross investment
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Discuss the difference between GDP and GNP. What about Nominal GDP and Real GDP?
Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. As such, it also measures...
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