Question

A country's nominal GDP increases from $360 billion to $404.16 billion, and its real GDP increases from $320 billion to $336.8 billion. Based on this information the country's production of goods and services increased by % and the prices of the goods and services produced increased by %. Enter numbers rounded to two decimal places.

Answer 1

Prices of goods produced increased by :20.0%

Quantity of good produced increase by :5.25%

Step-by-step explanation:

Nominal GDP is the Gross Domestic Product measured in current prices. Changes

Prices of goods increased by

= ( A- B)/B × 100

A-nominal GDP in current year

B-Real GDP in Current year

= (404.16 - 336.8)/ 336.8 = 20%

Real GDP is the amount by the quantity of goods and services in an economy has increased over a period of time.

Change in real GDP =

= ( C- D)/D × 100

C-Real GDP in current year

D-Real GP in previous year

= (336.8 -320)/320 × 100

= 5.25%