Consider a simple economy that produces two goods: cupcakes and muffins

Home Consider a simple economy that produces two goods: cupcakes and muffins

Consider a simple economy that produces two goods: cupcakes and muffins

  • 322 Views
  • 01 Feb, 2019

Votes Up

0

Vote Down

0

ANSWERS (5)

The gross domestic product is the value of the goods and services manufactured in the national economy in a particular financial year. In the question, the nominal and the real GDP has been calculated. The nominal GDP is the total value of the output in the economy. Thus, the value of the GDP is calculated at the current market rate of the products.

Whereas, the Real GDP is the real indicator of the growth of the economy, providing the information about the growth in the output of the economy than the previous financial year. To calculate the prices of the products manufactured in the current year, the rates are taken of the base year.

GDP Deflator is the tool to measure the change in the prices of the products or GDP over a period of time. It is the ratio of measuring the output, whether increased or decreased.

In this question, the GDP deflator in the financial year 2013, is 1.00 which is the base year. In the financial year 2014, the GDP deflator is 1.05, showing the increase in the prices of the products.

In year 2015, the deflator rate is 1.44, thus the prices of the product are increasing rapidly.

  • 0
  • 0

  • 0
  • 0

  • 0
  • 0

  • 0
  • 0

  • 0
  • 0

Add your Answer


Search Here

Latest Reviews

  • Marcus
    30 Apr, 2019

    My assignment help services are provided in the best way by this website. The writers have completed my assignment in such a way that they helped me increase my overall performance.

  • Emy
    29 Apr, 2019

    Awesome work done by the experts of this company. I visited this site to get math assignment completed. My assignment was complete in every aspect. Thanks to the professionals who provided assignment writing help.

  • Darina
    25 Apr, 2019

    All thanks to the writers of Assignment Help 4 Me who completed my Physics assignment in the right manner. The structure of the assignment was totally customized according to my needs and that too at cheap prices.

View All Reviews
Assignment Help 4 Me