Compute nominal GDP, GDP deflator and real GDP in 2010
Consider an economy which capable to produces and consumes bread and automobiles. Sales and price data for these products for two different years are shown below:
Year 2000 Year 2010
Price of an automobile $50 000 $60 000
Price of a loaf of bread $10 $20
Number of automobiles capable to produced 100 cars 120 cars
Number of loaves of bread capable to produced 500 000 loaves 400 000 loaves
a) Illustrate what is the nominal GDP in 2000 and 2010?
b) Using the year 2000 as the base year, Compute the real GDP in 2010?
c) Illustrate what is the GDP deflator in 2010?
d) Illustrate what is the inflation rate among 2000 and 2010?