2011 = (20)(2) + (10)(2) + (10)(3) = $90 2012 = (20)(3) + (5)(1.2) + (10)(3) = $96 b. (4 points) Calculate the value of real GDP for 2010, 2011, and 2012 using 2010 as the base year. Provide a general formula for real GDP and once you calculate your values place your answers in the following table. Year Real GDP 2010 2011 2012 Answer: Year Real GDP with 2010 base year 2010 = (10)(2) + (5)(1) + (20)(3) = $85 2011 = (20)(2) + (10)(1) + (10)(3) = $80 2012 = (20)(2) + (5)(1) + (10)(3) = $75 c. (3 points) Calculate the GDP deflator for 2010, 2011, and 2012 using 2010 as the base year and a 100 point scale. Provide a general formula for the GDP deflator and once you calculate your values place your answers in the following table. Year GDP Deflator with Base Year 2010 and measured on a 100 point scale 2010 2011 2012 Answer: Year GDP Deflator with Base Year 2010 and measured on a 100 point scale 2010 = (85/85)*100 = 100 2011 = (90/80)*100 = 112.5 2012 = (96/75)*100 = 128 d. (4 points) Based upon your calculation of the GDP deflator was there inflation in this economy during the three year period under consideration? Explain your answer and provide numerical expressions to support your answer. (No need to reduce this expression to a numerical value!) Answer: The GDP deflator increased from 2010 to 2011 and from 2011 to 1012 and this we can interpret as indicating there was inflation during this three year period of time in Lattia. Numerical approximations of the rate of inflation can be given as follows:
2011 = (20)(2) + (10)(2) + (10)(3) = $90 2012 = (20)(3) + (5)(1.2) + (10)(3) = $96 b. (4 points) Calculate the value of real GDP for 2010, 2011, and 2012 using 2010 as the base year. Provide a general formula for real GDP and once you calculate your values place your answers in the following table. Year Real GDP 2010 2011 2012 Answer: Year Real GDP with 2010 base year 2010 = (10)(2) + (5)(1) + (20)(3) = $85 2011 = (20)(2) + (10)(1) + (10)(3) = $80 2012 = (20)(2) + (5)(1) + (10)(3) = $75 c. (3 points) Calculate the GDP deflator for 2010, 2011, and 2012 using 2010 as the base year and a 100 point scale. Provide a general formula for the GDP deflator and once you calculate your values place your answers in the following table. Year GDP Deflator with Base Year 2010 and measured on a 100 point scale 2010 2011 2012 Answer: Year GDP Deflator with Base Year 2010 and measured on a 100 point scale 2010 = (85/85)*100 = 100 2011 = (90/80)*100 = 112.5 2012 = (96/75)*100 = 128 d. (4 points) Based upon your calculation of the GDP deflator was there inflation in this economy during the three year period under consideration? Explain your answer and provide numerical expressions to support your answer. (No need to reduce this expression to a numerical value!) Answer: The GDP deflator increased from 2010 to 2011 and from 2011 to 1012 and this we can interpret as indicating there was inflation during this three year period of time in Lattia. Numerical approximations of the rate of inflation can be given as follows:
secondmidtermsummer2014withanswers.docx