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Macroeconomics Lecture 5 Real vs Nominal GDP
- 4. Quizmaster 1. Ten Questions 2. Three answers for each question 3. Email to Connor at by 3:00pm cjh425@go.byuh.edu 4. One Extra Point on Exam
- 11. Prices Nominal or Current Real or Constant
- 12. Inflation Cause: Printing money faster than making goods and services Effect: Rising prices
- 14. Real will always have a base year
- 16. Pizza Soda Year Price Qty Total Price Qty Total Total Total % Change 2010 $5 100 $500 $1.00 50 $50 $550 2011 $6 134 $804 $1.50 40 $60 $864 57.1% 2011* $5 134 $670 $1.00 40 $40 $710 29.1% 2012 $10 150 $1500 $2.00 30 $60 $1,560 80.6% 2012* $5 150 $750 $1.00 30 $30 $780 9.9% * Prices adjusted to 2010 Rates Real versus Nominal GDP
- 17. GDP Deflator Nominal GDP Real GDP = x 100
- 18. GDP Deflator $1,560 $780 = x 100 = 200 Prices have doubled
- 19. If the the GDP Deflator is 178 and a Pizza cost $15, what was the price in the base year? $15 ÷ 1.78 = $8.43
- 20. GDP Inflation Rate GDP DeflatorYear 2 - GDP DeflatorYear 1 GDP DeflatorYear 1 = x 100
- 21. If the the GDP Deflator is 178 in 2010 and 192 in 2011, what was the rate of inflation? 192-178 178 x 100 =7.86%
- 22. Year Nominal Real GDP Deflator 2010 550 550 2011 864 710 2012 1560 780 GDP Deflator = (Nominal ÷ Real ) x 100
- 23. Problems with GDP Inequality Types of Goods and Services Happiness Others?
- 24. Rule of 70s Year to Double = 70 ÷ Rate of Growth
- 25. Pooleynesia grows at 7% a year. Current GDP per capita is $5,000.What will GDP per capita be in 40 years?
- 27. Culture Human Beings Ideas Physical Human Intellectual Financial Inventions Entrepreneurs Free Markets Innovations The Capitals of Innovation
- 28. What is Wealth? Any thing we value
- 29. What is Economics? The study of how human beings create value for one another
- 30. What is Capital? Any thing we can use to create value
- 32. Culture Human Beings The Capitals of Innovation
- 34. Cultural Capital? How people treat each other
- 35. Cultural Capital is determined by the worldview of leaders
- 37. Property Rights Rule of Law
- 39. Deidre McCloskey Bourgeois Values "Sweet Talk" "Have a Go"
- 40. Culture Human Beings Ideas The Capitals of Innovation
- 41. A thought about how to potentially create new value Idea
- 42. Culture Human Beings Ideas The Capitals of Innovation Physical
- 43. atoms and energy natural resources time buildings equipment things than make things Physical Capital
- 44. Culture Human Beings Ideas The Capitals of Innovation Physical Human
- 47. I look for three things in hiring people. The first is personal integrity, the second is intelligence, and the third is a high energy level. But if you don’t have the first, the other two will kill you
- 48. Culture Human Beings Ideas The Capitals of Innovation Physical Human Intellectual
- 51. Culture Human Beings Ideas The Capitals of Innovation Physical Human Intellectual Financial
- 52. Money put at risk over time Financial Capital
- 54. money put at risk over time money is time savers and borrowers (1+r)n insurance limited liability corporations double entry accounting Financial Capital
- 55. Culture Human Beings Ideas The Capitals of Innovation Physical Human Intellectual Financial Inventions
- 56. Proof of an Idea Thought to reality Invention
- 57. Culture Human Beings Ideas The Capitals of Innovation Physical Human Intellectual Financial Inventions Entrepreneurs
- 58. Risk Takers Value Inventions to Innovations Freedom to Discover Learning Failure Entrepreneurs
- 61. Culture Human Beings Ideas The Capitals of Innovation Physical Human Intellectual Financial Inventions Entrepreneurs Free Markets
- 62. Where buyers and sellers discover value Free Markets
- 63. Solve each other's problems with a price system Free Markets
- 66. All Trades Have One Price And Two Values
- 67. Culture Human Beings Ideas Physical Human Intellectual Financial Inventions Entrepreneurs Free Markets Innovations The Capitals of Innovation
- 68. We create value by continuously innovating our capitals