Question

Consider the following data on U.S. GDP: Year GDP (Billions of current dollars) (Billions of 2012 dollars) 2014 17,521.7 16,899.8 2015 18,219.3 17,386.7 2016 18,707.2 17,659.2 2017 19,485.4 18,050.7 2018 20,494.1 18,566.4 Source: "National Economic Accounts."U.S. Bureau of Economic Analysis. The percentage change in nominal GDP from 2017 to 2018 was . The percentage change in real GDP from 2014 to 2015 was . True or False: The percentage change in real GDP from 2014 to 2015 was higher than the percentage change in real GDP from 2015 to 2016. True False

Answer 1

Answer:

= 5.18%

2.88%

True

Explanation:

Nominal GDP is GDP calculated using current year prices

Change in nominal GDP from 2017 to 2018 = 20,494.1 /  19,485.4 - 1 = 0.0518 = 5.18%

Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation

The percentage change in real GDP from 2014 to 2015 = 17,386.7 / 16,899.8 - 1 = 0.0288 = 2.88%

percentage change in real GDP from 2015 to 2016 = 17,659.2 / 17,386.7 - 1 = 1.57%

The percentage change in real GDP from 2014 to 2015 was higher than the percentage change in real GDP from 2015 to 2016