Macro Topic 2.6 Real v. Nominal GDP_Quiz | Real_vs_Nominal_GDP_2022

Real vs Nominal GDP Macro Topic 2.6 Real v. Nominal GDP Part 1: Check Your Understanding- Answer the questions. 1. If your nominal wage increases by 25%, will you definitely have a 25% increase in purchasing power? Why or why not? 2. If your nominal wage rises from $10 to $12 while the CPI rises from 150 to 180 will your real wage increase, decrease, or stay the same? Explain. 3. If nominal GDP increased by 20% and inflation increased by 10%, did the real GDP increase, decrease, or stay the same? Explain? 4. Assume that the nominal GDP is $60 billion and the real GDP is $40 billion. Calculate the GDP deflator. Show your work. 5. Assume that the nominal GDP is $70 billion and the GDP deflator is 140. Calculate the real GDP. Show your work. 6. Calculate the real GDP in Year 2020. Show your work. 7. Calculate the GDP deflator in Year 2021 if the real GDP is $12,000. Show your work. 8. Calculate the rate of real output growth between 2019 and 2020. Show your work. 9. Calculate the real GDP per capita in Year 2020. Show your work. 10. Calculate the real GDP per capita in year 2021. Show your work. 11. Assume that the real GDP in Year 2022 is $8000 and the GDP deflator is 200. Calculate the Nominal GDP. Show your work. Part 3 - Stretch Your Thinking- Answer the question. 12. Over time, the CPI tends to estimate higher rates of inflation than the GDP deflator. Identify one reason why this occurs.