year nominal GDP GDP deflator
(billions) (based year 1992)
1993 725 101.2
1994 762 102.4
Are these answeres correct????
4.a) The growth rate of nominal income between 1993 and 1994 is 5.10%
(725-762)/725*100=5.10%
b) The growth rate of the GDP deflator between 1993 and 1994 is 1.17%
(101.2-102.4)/102.4*100=1.17%
To determine whether the answers are correct, let's calculate the growth rates and compare them to the provided percentages.
a) The growth rate of nominal income between 1993 and 1994 is calculated using the following formula:
Growth rate = (New value - Old value) / Old value * 100
Plugging in the values:
Growth rate = (762 - 725) / 725 * 100
Growth rate = 37 / 725 * 100
Growth rate = 5.10%
As you correctly calculated, the growth rate of nominal income between 1993 and 1994 is indeed 5.10%.
b) The growth rate of the GDP deflator between 1993 and 1994 can be calculated using the same formula:
Growth rate = (New value - Old value) / Old value * 100
Plugging in the values:
Growth rate = (102.4 - 101.2) / 101.2 * 100
Growth rate = 1.2 / 101.2 * 100
Growth rate ≈ 1.18%
The calculated growth rate of the GDP deflator between 1993 and 1994 is approximately 1.18%, which is slightly different from the provided 1.17%.
Therefore, the answer for a) is correct, while b) has a slight discrepancy but is still close enough to be considered correct.