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Chapter 9: Q. 11 (page 210)

Between the start of 2018 and the start of 2019 , a country's economic growth rate was4 percent. Its population did not change during the year, nor did its price level. What was the rate of increase of the country's nominal GDP during this one-year interval?

Short Answer

Expert verified

There is no change in rate during one year interval.

Step by step solution

01

Introduction

The nominal GDP, often known as the current dollar GDP, is a macroeconomic estimate of the worth of goods and services based on current prices.

Adjustments for changes in inflation are factored into real GDP.

02

Explanation

When there is no change in the price level in a country, the nominal GDP equals the real GDP. Nominal GDP was deflated to produce real GDP.

As a result, with no inflation, real and nominal GDP would be the same.

As a result of these factors and the current economic growth rate, nominal GDP growth would likewise be 4percent.

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Most popular questions from this chapter

"The largest change is from zero to one." Does this statement have anything to do with relative growth rates in poorer versus richer countries?

On the basis of the information in Problem 9-10and reference to Table 9-3, about how many more dollars' worth of real GDP per capita would the person in China be earning 50years from now than the individual in Mozambique?

A nation's capital goods wear out over time, so a portion of its capital goods become unusable every year. Last year, its residents decided to produce no capital goods. It has experienced no growth in its population or in the amounts of other productive resources during the past year. In addition, the nation's technology and resource productivity have remained unchanged during the past year. Will the nation's economic growth rate for the current year be negative, zero, or positive?

Consider Figure 9-7, and suppose that we round the rate of growth of per capita real GDP experienced in the European Union between 2001 and 2017 to the nearest full percentage point. Based on the information in Table 9-3, by what percentage will per capita real GDP increase over the next 30 years if the economic growth rate remains at this rounded level?

Consider the following table displaying annual growth rates for nations X,Yand Z, each of which entered2017 with real per capita GDP equal to$20,000.

a. Which nation most likely experienced a sizable earthquake in late 2017that destroyed a significant portion of its stock of capital goods, but was followed by speedy investments in rebuilding the nation's capital stock? What is this nation's per capita real GDP at the end of2020, rounded to the nearest dollar?

b. Which nation most likely adopted policies in 2017 that encouraged a gradual shift in production from capital goods to consumption goods? What is this nation's per capita real GDP at the end of 2020, rounded to the nearest dollar?

c. Which nation most likely adopted policies in 2017that encouraged a quick shift in production from consumption goods to capital goods? What is this nation's per capita real GDP at the end ofrole="math" localid="1651525075599" 2020 , rounded to the nearest dollar?
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