Adding to Table 111 if in 2007 real GDP was 132064 billion a

Adding to Table 11.1, if in 2007 real GDP was $13,206.4 billion and nominal GDP was $14,028.7 billion, calculate the percentage change from 2006 to 2007 in nominal GDP, real GDP, and the price level. What is the value of the GDP deflator in 2007?

TABLE 11.1 Nominal Versus Real GDP VARIABLE Nominal GDP Percent change Real GDP Percent change GDP deflator (price changes) Percent change 2006 $13,3772 billion 5.97 $12,9585 billion 2005 12,623.0 billion 12,623.0 billion 2.66 103.23 3.23

Solution

2010 GDP (nominal, real) = 50, 50

2011 case 1 GDP (nominal, real) = 95, 50

2011 case 2 GDP (nominal, real) = 95, 95

2011 case 3 GDP (nominal, real) = 182.5, 95

GDP deflator in 2007 = 106.23