What is the nominal GDP of each year?

What is the Real GDP for each year (using year 1 as a base year)?

Year 1 Year 2 Year 3

Quantity Good A 6 8 10

Price Good A 1000 1100 1100

Quantity Good B 20 20 20

Price Good B 4 6 10

Using year one as the base year, what is the value of the price index in year 1? Year 2?

What is the rate of inflation between year 1 and year 2?

Price Year 1 Price Year 2 Market Basket Quantity

Pens $0.50 $0.60 100

Notepads $0.60 $0.50 50

Paperclips $0.20 $0.30 50

Calculate the GDP using the given information shown below

• Consumption spending: $55• Rental Income: $10• Interest: $30• Profits: $13• Investment Spending : $16• Wages: $31• Government Purchases: $42• Imports: $6• Exports: $14

Calculate the GDP using the given information shown below

• Consumption spending: $80• Rental Income: $20• Interest: $25• Profits: $15• Investment Spending : $12• Wages: $27• Government Purchases: $23• Imports: $11• Exports: $5

Value-Added GDP Question

The Ford Company buys $4000 worth of steel from the Steel manufacturers, $3000 worth of computerized hardware and software, and $2000 worth of mechanical tools to manufacture a certain model of vehicle. Fords sells this particular model of vehicle at $15,000. The value-added by Ford is equal to: