Economics - Cengage Learning

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ACTIVE LEARNING 1 Answers C. D. Real versus Nominal GDP § Inflation can distort economic variables like GDP, so we have two versions of GDP: § Nominal GDP § Real GDP EXAMPLE: Compute nominal GDP in each year: 2011: 2012: 2013: Pizza Latte year P Q P Q 2011 $10 400 $2.00 1000 2012 $11 500 $2.50 1100 2013 $12 600 $3.00 1200 23 Increase: 24 © 2012 CengageLearning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.
illions EXAMPLE: Compute real GDP in each year, using 2011 as the base year: 2011: 2012: 2013: Pizza Latte year P Q P Q 2011 $10 400 $2.00 1000 2012 $11 500 $2.50 1100 2013 $12 600 $3.00 1200 EXAMPLE: year 2011 2012 2013 Nominal GDP Real GDP Nominal and Real GDP in the U.S., 1965–2010 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 Real GDP (base year 2005) Increase: Nominal GDP $0 1960 1970 1980 1990 2000 2010 25 26 © 2012 CengageLearning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Page 1 and 2: N. Gregory Mankiw Essentials of Eco
Page 3 and 4: What This Diagram Omits § The gove
Page 5 and 6: Gross Domestic Product (GDP) Is…
Page 7: U.S. GDP and Its Components, 2010 Y
Page 11 and 12: ACTIVE LEARNING 2 Answers GDP and E
Page 13: GDP and Literacy in 12 countries Ad

Economics - Cengage Learning

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