##### Help with macroeconomic

label Economics
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Consumption in year three is \$200, investment in year three is \$100, government spending in year three is \$150, exports in year three are \$100, imports in year three are \$50. Prices for everything in year one are \$20, in year two prices for everything are \$28, in year three prices for everything are \$35. What will the size of real GDP be for year three?

A)
B)
C)
D)
E)
Aug 10th, 2015

nominal GDP = private consumption + gross investment + government investment + government spending + (exports -   imports).

=200+150+ 100-50 = 400

Real GDP=GDP*inflation

Aug 10th, 2015

Kindly allow me to finish for real GDP

Aug 10th, 2015

REAL GDP =NOMINAL GDP /DEFLATOR

DEFLATOR = 1+INFLATION RATE =(35-20)/20 =15/20 =75%IN 2 YEARS.

INFLATION = 37.5%

DEFLATOR=1+37.5% =1.375

REAL GDP=400/1.375= 290.9

Aug 10th, 2015

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Aug 10th, 2015
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Aug 10th, 2015
Sep 26th, 2017
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