Economics Homework Solutions
Problem
#65587

Calculating GDP, Review of GDP trends

Use the following data to answer questions 1-3 (be sure to provide all calculations).
Quantities  Produced Quantities Produced Prices Prices
CDs Tennis Racquets CDs Tennis racquets
Year 2004 100 200 20 110
Year 2005 120 210 22 120



1. Calculate real GDP for 2004 and 2005 using 2004 prices. By what percent did real GDP grow?

2. Calculate the value of the price index for GDP for 2005 using 2004 as the base year. By what percent did prices increase?

3. Now calculate real GDP for 2004 and 2005 using 2005 prices. By what percent did real GDP grow?

4. Review the GDP information for the past few years from the Bureau of Economic Analysis's Website. Provide a brief summary of the GDP trends over that timeframe and discuss two or three events which may have caused these trends.

BE SURE TO SHOW YOUR WORK FOR EACH CALCULATION.

I WILL ATTACH THE TABLE WITH THE DATA

Attached file(s):
Attachments
Unit 4 ip 2 typed out.doc  View File

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Unit 4 ip 2 typed out.doc


Use the following data to answer questions 1-3 (be sure to provide all
calculations).



1. Calculate real GDP for 2004 and 2005 using 2004 prices. By what
percent did real GDP grow?

2. Calculate the value of the price index for GDP for 2005 using 2004 as
the base year. By what percent did prices increase?

3. Now calculate real GDP for 2004 and 2005 using 2005 prices. By what
percent did real GDP grow?

4. Review the GDP information for the past few years from the
HYPERLINK "http://www.bea.doc.gov/" \t "_blank" Bureau of Economic
Analysis's Website . Provide a brief summary of the GDP trends over that
timeframe and discuss two or three events which may have caused these
trends.

Be sure to show you work for each calculation.

Solution Summary

The solution calculates real GDP and price index for a simple case where only CDs and tennis racquets are produced.
Also there is a review of GDP information for the past few years from the Bureau of Economic Analysis's Website.

Solution
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Pushkal Kumar Pandey, MBA - 4.9/5
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