Chapter 23 - Part VIII - Measuring a Nation's Income - Problems and Applications - Page 503: 4

a) 2013 nominal GDP: 200 dollars 2014 nominal GDP: 400 dollars 2015 nominal GDP: 800 dollars 2013 real GDP: 200 dollars 2014 real GDP: 400 dollars 2015 real GDP: 400 dollars 2013 GDP deflator: 100 2014 GDP deflator: 100 2015 GDP deflator: 200 b) 2014 % change in nominal GDP: 100 2015 % change in nominal GDP: 400 2014 % change in real GDP: 100 2015 % change in real GDP: 0 2014 % change in GDP deflator: 0 2015 % change in GDP deflator: 100 c) 2014 had the greater increase in economic well-being due to the increase in real GDP.

a) 2013 nominal GDP: $1*100+2*50$ $100+100$ $200$ 2014 nominal GDP $1*200+2*100$ $200+200$ $400$ 2015 nominal GDP $2*200+4*100$ $400+400$ $800$ 2013 real GDP is the same as 2013 nominal GDP since 2013 is the base year. 2014 real GDP $1*200+2*100$ $200+200$ $400$ 2015 real GDP $1*200+2*100$ $200+200$ $400$ 2013 GDP deflator 2013 nominal GDP/2013 real GDP $200/200*100$ $1*100$ $100$ 2014 GDP deflator 2014 nominal GDP/2014 real GDP $400/400*100$ $1*100$ $100$ 2015 GDP deflator 2015 nominal GDP/2015 real GDP $800/400*100$ $2*100$ $200$ b) 2014 % change in nominal GDP: (2014 nominal-2013 nominal)/2013 nominal $(400-200)/200$ $200/200$ $1*100$ $100$ 2015 % change in nominal GDP: (2015 nominal-2014 nominal)/2014 nominal $(800-400)/400*100$ $400/400*100$ $4*100$ $400$ 2014 % change in real GDP: (2014 real-2013 real)/2013 real $(400-200)/200*100$ $200/200*100$ $1*100$ $100$ 2015 % change in real GDP: (2015 real-2014 real)/2014 real $(400-400)/400*100$ $0/400*100$ $0$ 2014 % change in GDP deflator: (2014 GDP inflator-2013 GDP inflator)/2013 GDP inflator $(100-100)/100*100$ $0/100*100$ $0$ 2015 % change in GDP deflator: (2015 GDP inflator-2014 GDP inflator)/2014 GDP inflator $(200-100)/100*100$ $100/100*100$ $100$