Suppose the hypothetical economy of Zululand produces only four goods: food, shelter, clothing,
and entertainment, and you are given the following information pertaining to the prices (P) and
quantities (Q) produced for the years 2018 to 2020. Along with the above information, the table
below provides some rudimentary calculations pertaining to prices and quantities for given years
along with the corresponding totals beneath each column. a) Using the above information, fill in
the table below for the values nominal GDP, real GDP, the GDP implicit price deflator, and the rate
of inflation for each of the three years, and clearly indicate what the base year is.What does the
GDP implicit price deflator represent? b) What is the nominal rate of growth in GDP from 2018 to
2019 ? The real rate (over the same period)? Why do they differ? c) Suppose that all of GDP is
consumed in the year it is produced, and that base year consumption (the base year from a) is
deemed the "representative" consumption bundle of the average consumer. Construct the
Consumer price index and calculate the yearly inflation rate for each year by placing the
appropriate values from the above table into the table below..
Suppose the hypothetical economy of Zululand produces only f.pdf
1. Suppose the hypothetical economy of Zululand produces only four goods: food, shelter, clothing,
and entertainment, and you are given the following information pertaining to the prices (P) and
quantities (Q) produced for the years 2018 to 2020. Along with the above information, the table
below provides some rudimentary calculations pertaining to prices and quantities for given years
along with the corresponding totals beneath each column. a) Using the above information, fill in
the table below for the values nominal GDP, real GDP, the GDP implicit price deflator, and the rate
of inflation for each of the three years, and clearly indicate what the base year is.What does the
GDP implicit price deflator represent? b) What is the nominal rate of growth in GDP from 2018 to
2019 ? The real rate (over the same period)? Why do they differ? c) Suppose that all of GDP is
consumed in the year it is produced, and that base year consumption (the base year from a) is
deemed the "representative" consumption bundle of the average consumer. Construct the
Consumer price index and calculate the yearly inflation rate for each year by placing the
appropriate values from the above table into the table below.
