Homework SourseSuppose the output and prices in an economy are given as fol
Suppose the output and prices in an economy are given as follows:
The percent growth rate of real GDP between 2014 and 2015 is ______________ if 2014 base year is used and is _________________ if 2015 base year is used.
1.39%; 1.37%
1.37%; 1.39%
39%; 37%
37%; 39%
| Year | Output of computers | Price of computers | Output of medical care | Price of medical care |
| 2014 | 10 | $100 | 50 | $200 |
| 2015 | 11 | $50 | 70 | $400 |
Solution
Suppose the output and prices in an economy are given as follows:
The percent growth rate of real GDP between 2014 and 2015 is ______________ if 2014 base year is used and is _________________ if 2015 base year is used.
Explanation GDP in 2014 = 100*10 +200*50 = $11000
GDP in 2015 = 11*100+70*200 = 15100
Growth rate = Change in income/ income in base year*100 =
If 2014 is base year= 4000/11000*100 = 36.27
If 2015 is base year = 4000/15100*100 = 26.66
| Year | Output of computers | Price of computers | Output of medical care | Price of medical care |
| 2014 | 10 | $100 | 50 | $200 |
| 2015 | 11 | $50 | 70 | $400 |
