@ (b) An economy produces three products, bags, computers and shirts. The prices and quantities of these products in 202

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B An Economy Produces Three Products Bags Computers And Shirts The Prices And Quantities Of These Products In 202 1 (62.15 KiB) Viewed 9 times

@ (b) An economy produces three products, bags, computers and shirts. The prices and quantities of these products in 2020 and 2021 are shown in the table below: 2021 Bags Computers Shirts Price $10 Fish Beef Train Ride $600 $18 2020 Quantity 300 100 2,000 2020 2021 Measure the nominal and real GDP for 2019 and-2020, using 2020 as the base year. Measure the nominal and real GDP growth rate in 2021. Which value is more accurate in measuring the growth rate of the economy? Explain. (14 marks) The information on price and quantity of three products consumed by a typical household in the year 2020 and 2021 is given by the table below Price $5 $10 $8 Price $12 $650 $20 2020 Quantity 330 110 2,200 Quantity Price 10 $5.50 5 $11 20 $9 2021 Quantity 12 4 22 Using 2020 as the base year, measure the CPI for 2021 and the inflation rate in 2021. Does this inflation rate correctly measure the cost of living changes for households in 2021? Explain. (6 marks) (c) "The transfer payment does not have any effect on the gross domestic product of an economy". Discuss the validity of this statement. (5 marks)