[Author’s Name]
[Institution’s Name]
Essay on Concepts & Problems in Macroeconomics
1. GDP 2004
(Prices of Cds x number of tennis racquets) + (Prices of the tennis racquets x Number of Cds) = (100x 200) + (20 x110) = 20000 + 2200= 22,200/-
GDP 2005
Prices of Cds x number of tennis racquets) + (Prices of the tennis racquets x Number of Cds) = (120 x210) + (22x 120) = 25200+ 2640 = 27840/-
Percentage of GDP increase from 2004 to 2005 = 22,200/ 27,840 = 79.7%
2. Price indexs = Price level year 1 – price level year 2 / Price level 2
= 200 -120 / 120 = 66%
3. Nominal GDP 2004
Nominal GDP CDs = 20000
Nominal GDP Tennis Racquets =2200
Nominal GDP 2005
Nominal GDP CDs = 25200
Nominal GDP Tennis Racquets =2640
GDP Deflator 2004
P1= 200/120= 1.6
GDP Deflator 2005
P1= 120/210 = .57
Real GDP 2004= 22200/1.6= 13875
Real GDP 2005= 27840/.57= 48842
Percentage increase = 13875/48842= 28%
As of mid-April 2004, the U.S. economy appeared to be recovering somewhat, with first quarter 2004 real growth in gross domestic product (GDP) of 5.0% (year-over-year).....
