Title Final Revision- Dr Omar- ECO - 2023 F.pdf ✅

Economics Final Revision Dr: Omar Amer 2022/2023 01066613742
2 1) A) Calculate the nominal and real GDP for the year 2014 B) Calculate the GDP growth rate SOL  Nominal GDP 2014 = sum of 2014 (current year) prices x 2014 (current year quantities) = P1 xQ1= (14 X 5) + (10 X 3) + (20 X 2) = 70 +30 +40 =140  Real GDP 2014 = sum of 2012 (base year) prices x 2014 (current year quantities) = P0 X Q1 = (12 X5) + (9 X 3) + (20 X 2) = 60 +27 + 40 = 127  Economic growth = REAL GDP this year – REAL GDP last year REAL GDP last year x100 In 2012 base year prices and current prices are the same therefore, real GDP in 2012 = nominal GDP in 2012 Real GDP in 2012 = (12 X 4) + (9X3) + (20 X 2) = 48 +27 + 40 = 115 GDP growth rate = ( 127 – 115 115 ) X 100 = 10.4 % ________________________________________________________ 2) If you have the following information: 1)calculate the rate of inflation in 2011. Was there inflation or deflation? Why? 2)calculate the rate of inflation in 2012. Was there inflation or deflation? Why? Year Food Housing Machines Price Quantity Price Quantity Price Quantity 2012 12 4 9 3 20 2 2014 14 5 10 3 20 2 Page 2