Economics Questions

Final Output of Economy in 2010

OUTPUT	QUANTITY	PRICE	VALUE OF FINAL Q
Coconut Milk	1 Million Gallons	$10/Gallon	$10Million
Wheat	2 Million Bushels	$4/Bushel	$8 Million
GDP			$18 Million

Final Output of Economy in 2011

OUTPUT	QUANTITY	PRICE	VALUE OF FINAL Q
Coconut Milk	1 Million Gallons	$20/Gallon	$20Million
Wheat	2 Million Bushels	$8/Bushel	$16 Million
GDP			$36 MILLION

NOMINAL GDP =∆P X ∆Q

REAL GDP= P X∆Q

PRICE DEFLATOR 2010 = NOMINAL GDP\REAL GDP X 100

PRICE DEFLATOR 2010 =$18M\$18M X 100 =100 2010

PRICE DEFLATOR 2011 = NOMINAL GDP\REAL GDP X 100

PRICE DEFLATOR 2011 =$36M\$18M X 100 =200 2011