Respuesta :
Answer: The answer is as follows:
Explanation:
Given that,
Output in 1984 = 7,000 buckets of chicken
Price in 1984 = $10
Output in 2005 = 22,000
Price in 2005 = $16
(1) GDP price index for 1984, using 2005 as the base year:
= [tex]\frac{Price\ of\ good\ in\ specific\ year}{Price\ of\ good\ in\ base\ year}\times100[/tex]
= [tex]\frac{10}{16}\times100[/tex]
= 62.5
(2) Price level, as measured by this index, rise between 1984 and 2005:
Percentage change in the price level = [tex]\frac{New\ price\ level - original\ price\ level}{Price\ in\ base\ year}\times100[/tex]
= [tex]\frac{100 - 62.5}{62.5}\times100[/tex]
= 60%
(3) Real GDP for t year = Base price × Quantity in t year
Real GDP in 1984 = Quantity in 1984 × Price in 2005
= 7,000 × 16
= $ 112,000
Real GDP in 2005 = Quantity in 2005 × Price in 2005
= 22,000 × 16
= $ 352,000
The GDP price index for 1984 is 62.5, the percentage rise in price level is 60%, and the real GDP in 1984 and 2005 is $112,000 and $352,000 respectively.
What is GDP Price Index?
The GDP price index can be defined as a tool to measure inflation in the prices of a good or service.
The calculation of GDP price index can be done through the formula:
[tex]\rm GDP\: Price \:Index = \dfrac{Price\: in\:a\:specific\:year}{Price\:in\:base\:year} \times 100[/tex]
The GDP Price index for 1984 will be:
[tex]\rm GDP\: Price \:Index = \dfrac{Price\: in\:a\:1984\:}{Price\:in\:2005} \times 100\\\\\rm GDP\: Price \:Index = \dfrac{\$10}{\$16}\times 100\\\\\rm GDP\: Price \:Index = 62.5[/tex]
Percentage rise in the price level will be calculated as:
[tex]\begin{aligned} \rm Percentage\:rise\:in\:price\:level &= \dfrac{New\:price\:level - GDP \:price\:index}{ GDP \:price\:index} \times 100\\\\&= \dfrac{100 - 62.5}{62.5} \times 100\\\\&=60\%\end[/tex]
Real GDP refers to the GDP of goods or services adjusted with the current rate of inflation. It accurately reflects the output in an economy as compared to nominal GDP.
To calculate real GDP, the formula is:
[tex]\rm Real GDP = Quantity\:in\:current\:year\times Price\:in\:base\:year[/tex]
Real GDP in 1984 will be:
[tex]\rm Real GDP = Quantity\:in\:1984\times Price\:in\:2005\\\\\rm Real GDP = 7,000 \times \$16\\\\\rm Real GDP = \$112,000[/tex]
Real GDP in 2005 will be:
[tex]\rm Real\: GDP = Quantity\:in\:2005\times Price\:in\:2005\\\\\rm Real\: GDP = 22,000 \times \$16\\\\\rm Real\: GDP = \$352,000[/tex]
Therefore the correct answers are 62.5, 60% and $112,000 and $352,000.
Learn more about the GPD price index here:
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