Answer Happy

1. 2. 3. 4. Assume that the following table records the total output and prices for an entire economy and the base year is 20X0. Year 20X0 20X1 Price of Popcorn $1.25 $1.50 Quantity of Popcorn 375 units 425 units Price of Smartphones $400.00 $410.00 Quantity of Smartphones 100 units 120 units (a) What is the value of nominal GDP in 20X0? 20X1? (3 marks) (b) What is the value of real GDP in 20X0? 20X1? (3 marks) (c) What is the value of the GDP deflator in 20X0? 20X1? (3 marks) (d) From 20X0 to 20X1, what was the inflation rate, i.e., change in prices? (3 marks) (e) was the increase in nominal GDP from 20X0 to 20X1 mostly due to an increase in real output or due to an increase in prices? Explain and support with a calculation. (5 marks) Marc and Josh have a project that must be completed for a business class. The project involves doing a series of calculations and writing a report. It would take Marc 8 hours to do the required calculations and 8 hours to write the report. It would take Josh 15 hours to do the calculations and 30 hours to write the report. For each option below, show how much time is spent on each task and the total time on the project. (a) How much time would it take the two to complete the project if they divide the calculations equally and the writing equally? Briefly explain your answer. (4 marks) (b) If both Marc and Josh decide to both contribute to the project, how much time would it take the two to complete the project if they use comparative advantage and specialization in calculating or writing? Briefly explain your answer. (4 marks) (c) If Josh and Marc have the same opportunity cost of $10 per hour, is there a better solution than for each to specialize in calculating or writing? Briefly explain your answer. (4 marks) Mike and Jane meet Sam, the banker, to work out the details of a loan. Mike, Jane, and Sam all expect that inflation will be 1.9% over the term of the loan, and they agree on a nominal interest rate of 4.5%. In actuality, the inflation rate is 2.3% over the term of the loan. (a) What was the expected real interest rate? (2 marks) (b) What was the actual real interest rate? (2 marks) (c) Who benefited and who lost because of the unexpected inflation? Explain. (3 marks) (a) In Canada, citizens benefit from property rights, whether it be over real estate, land, intellectual property, or vehicles. Why are property rights important for the growth of a nation's standard of living? (4 marks) (b) Provide two examples where property rights are important. (2 marks)