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WEEK 6 ASSIGNMENT TEMPLATE
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Chapter 5 – Questions for Review #8
Why is it desirable for a country to have a large GDP? Give an example of something that would raise GDP
and yet be undesirable.
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Chapter 5 – Problems & Applications #4
Below are some data from the land of milk and honey.
Year
2010
2011
2012
Price of Milk
$1
$1
$2
Quantity of Milk
100 quarts
200
200
Price of Honey
$2
$2
$4
Quantity of Honey
50 quarts
100
100
a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2008 as the base year.
SHOW YOUR WORK!
2010 nominal GDP: _________________________________________________________________________
2011 nominal GDP: _________________________________________________________________________
2012 nominal GDP: _________________________________________________________________________
2010 real GDP: ____________________________________________________________________________
2011 real GDP: ____________________________________________________________________________
2012 real GDP: ____________________________________________________________________________
2010 GDP deflator: _________________________________________________________________________
2011 GDP deflator: _________________________________________________________________________
2012 GDP deflator: _________________________________________________________________________
Chapter 6 – Questions for Review #1
Describe the three problems that make the consumer price index an imperfect measure of the cost of living.
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Chapter 6 – Problems and Applications #9
When deciding how much of their income to save for retirement, should workers consider the real or the
nominal interest rate that their savings will earn? Explain.
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