The answer i got is :
GDP grew 10%
GDP for 2006 using 2005 as the base year increase by 20%
real GDP grow? 10%
If i'm right, let me know, if not, please show Calculation
Thank You
Use the following data to answer questions 1-3 (be sure to provide all calculations).
Quantity
Year CDs Tennis Racquets
2005 90 180
2006 100 90
Price
CD's Tennis Racquets
$18 $100
$20 $110
Calculate real GDP for 2005 and 2006 using 2005 prices. By what percent did real GDP grow?
Calculate the value of the price index for GDP for 2006 using 2005 as the base year. By what percent did prices increase?
Now calculate real GDP for 2005 and 2006 using 2006 prices. By what percent did real GDP grow?
Review the GDP information for the past few years from the Bureau of Economic Analysis's Website. Provide a brief summary of the GDP trends over that timeframe and discuss two or three events which may have caused these trends.
Well, I'm not going to give you the answer straight out. You should try to figure that out by yourself.
What I will tell you is that to increase a number by 20% you have to find 20% of that number first.
To do that, divide the number by 100, then multiply it by 20. that is 20% of that number. Then you can just take that number and add it to your original number.
Is that the answer you were looking for? Your question was sort of confusing.
Hope this helps!
~Brenna~
To calculate the real GDP for 2005 and 2006 using 2005 prices, we need to multiply the quantities of each good by their respective prices in 2005. Here are the calculations:
For 2005:
Real GDP = (Quantity of CDs in 2005 * Price of CDs in 2005) + (Quantity of Tennis Racquets in 2005 * Price of Tennis Racquets in 2005)
= (90 * $18) + (180 * $100)
= $1,620 + $18,000
= $19,620
For 2006:
Real GDP = (Quantity of CDs in 2006 * Price of CDs in 2005) + (Quantity of Tennis Racquets in 2006 * Price of Tennis Racquets in 2005)
= (100 * $18) + (90 * $100)
= $1,800 + $9,000
= $10,800
To calculate the percentage growth in real GDP from 2005 to 2006, we can use the following formula:
Percentage Growth = (Real GDP in 2006 - Real GDP in 2005) / Real GDP in 2005 * 100
= ($10,800 - $19,620) / $19,620 * 100
= -$8,820 / $19,620 * 100
≈ -44.9%
Now let's calculate the value of the price index for GDP for 2006 using 2005 as the base year. The price index measures the cost of the same goods and services in two different time periods.
Price Index = (Price of CDs in 2006 / Price of CDs in 2005) + (Price of Tennis Racquets in 2006 / Price of Tennis Racquets in 2005) / 2
= ($20 / $18) + ($110 / $100) / 2
= 1.11 + 1.1 / 2
= 2.21 / 2
= 1.105
To calculate the percentage increase in prices from 2005 to 2006, we can use the following formula:
Percentage Increase = (Price Index - 1) * 100
= (1.105 - 1) * 100
= 0.105 * 100
= 10.5%
Now, let's calculate the real GDP for 2005 and 2006 using 2006 prices. We need to multiply the quantities of each good by their respective prices in 2006:
For 2005:
Real GDP = (Quantity of CDs in 2005 * Price of CDs in 2006) + (Quantity of Tennis Racquets in 2005 * Price of Tennis Racquets in 2006)
= (90 * $20) + (180 * $110)
= $1,800 + $19,800
= $21,600
For 2006:
Real GDP = (Quantity of CDs in 2006 * Price of CDs in 2006) + (Quantity of Tennis Racquets in 2006 * Price of Tennis Racquets in 2006)
= (100 * $20) + (90 * $110)
= $2,000 + $9,900
= $11,900
To calculate the percentage growth in real GDP from 2005 to 2006 using 2006 prices, we can use the following formula:
Percentage Growth = (Real GDP in 2006 - Real GDP in 2005) / Real GDP in 2005 * 100
= ($11,900 - $21,600) / $21,600 * 100
= -$9,700 / $21,600 * 100
≈ -44.9%
Please note that the calculations show a negative growth in real GDP from 2005 to 2006. This could indicate a decrease in overall economic output. However, it's important to consider additional information and data to understand the full context of the GDP trends over the timeframe mentioned and the potential events that may have caused them.