Homework SourseQuestion 6 GDP This question relates to Course Learning Obje
Question 6: GDP
This question relates to Course Learning Objective 2 and is worth 10 points.
The table below demonstrates the U.S. Nominal GDP and Price Level, from 2006-2015.
Year
Nominal GDP (billions of dollars)
Price Level (GDP deflator)
2006
13,855.9
95
2007
14,477.6
97
2008
14,718.6
99
2009
14,418.7
100
2010
14,964.4
101
2011
15,517.9
103
2012
16,155.3
105
2013
16,663.2
107
2014
17,348.1
109
2015
17,937.8
110
Use the information in the table to calculate the real 2015 gross domestic product in 2009 dollars. Explain how the calculation is performed and the reasoning behind it.
| Year | Nominal GDP (billions of dollars) | Price Level (GDP deflator) |
|---|---|---|
| 2006 | 13,855.9 | 95 |
| 2007 | 14,477.6 | 97 |
| 2008 | 14,718.6 | 99 |
| 2009 | 14,418.7 | 100 |
| 2010 | 14,964.4 | 101 |
| 2011 | 15,517.9 | 103 |
| 2012 | 16,155.3 | 105 |
| 2013 | 16,663.2 | 107 |
| 2014 | 17,348.1 | 109 |
| 2015 | 17,937.8 | 110 |
Solution
Solution:
Formula used:
Real GDP = (Nominal GDP / GDP Deflator) x 100
The GDP deflator is based on a GDP price index
| Year | Nominal GDP (billions of dollars) | Price Level (GDP deflator) | Real GDP |
| 2006 | 13,855.90 | 95 | 14,585.16 |
| 2007 | 14,477.60 | 97 | 14,925.36 |
| 2008 | 14,718.60 | 99 | 14,867.27 |
| 2009 | 14,418.70 | 100 | 14,418.70 |
| 2010 | 14,964.40 | 101 | 14,816.24 |
| 2011 | 15,517.90 | 103 | 15,065.92 |
| 2012 | 16,155.30 | 105 | 15,386.00 |
| 2013 | 16,663.20 | 107 | 15,573.08 |
| 2014 | 17,348.10 | 109 | 15,915.69 |
| 2015 | 17,937.80 | 110 | 16,307.09 |
