Economics help needed to Compute the Nominal GDP

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Let the price of Barbancourt ( the Haitian Rum) be $15 a bottle in the year 200 and $25 in the year 2014 and its production 5,000 and 7,500 bottles respectively for the two years. Let the price of a bag of rice be $200 in 2000 and $350 in 2014, when its production is 10,000 and 25,000 bags for the same two years. Let the price of a bag of beans be $250 in 2000 and $400 in 2014, when its production is 8,000 and 20,000 bags of the two years respectively. Using the yer 2000 as the base year compute

Nov 6th, 2015

Thank you for the opportunity to help you with your question!

Calculation for GDP....

For year 2000......

For rum, cost of 5000 bottlles=15x5000=7500dollars

Cost of 10000 bags of rice=10,000x200=2000,000dollars

Cost of 800 bags of beans=250x8000=1400,000dollars

Total GDP for year 2000=7500+2000,000+1400,000=3475,000dollars

Now for year 2014......

Cost for 7500 bottles of rum=25x7500=187500dollar

Cost of 25,000bags of rice=25,000x350=8750,000dollar

Cost of 20,000 bags of beans=400x20,000=8000000dollar

So GDP for 2014=187500+8750000+8000000=16937500dollar

Please let me know if you need any clarification. I'm always happy to answer your questions.
Nov 6th, 2015

What is the real GDP for both years

Nov 6th, 2015

Real GDP accounts for the price changes that may occur due to inflation.If prices change from one period to the next but actual output does not change,NGDP will also change even though output remains same.To adjust for price change,RGDP is calculated using prices from specific year , the base year.

In this case base year is year for year 2000 the NGDP and RGDP are same. For year 2014 ,RGDP and N GDP are different.We can calculate the cost of all items separately , using the cost price for each item for year 2000, though quantity will be for year 2014. And you can calculate in similar way and find RGDP for year 2014. I think this will help you.

Nov 6th, 2015

What is the Implicit price deflator for GDP for both years?

Nov 7th, 2015

What is the CPI for both years

Nov 7th, 2015

GDP deflator for year 2000 will be same as NGDP because our base year is year 2000

For year 2014, we can calculate GDP deflator....

Cost of 7500 bottles of rum=15x7500=112,500dollars

Cost of 25,000 of bags of rice=25,000x200=5000,000dollars

Cost of 20,000 bags of beans=20,000x250=5000,000dollars

Total cost=GDP deflator for year2014=112,5000+5000,000+5000,000=10112,500dollars

When we calculate GDP deflator, we take the cost price for the base year and quantity for the year for which we are calculating GDP deflator , here this is year 2014.

CPI, consumer price index.....

This is the estimate of the price level of consumer goods and services in an economy.

A CPI takes certain basket of common goods and services and tracks the changes in the prices of that basket of goods over time.

Calculation for CPI.....

Step(1) a base year, say year 2000

Step(2) a basket of goods, say rum, beans bags and rice bags and add the prices of all goods in that year.

Step(3) the year you want to calculate CPI, here year 2014 , and add all the prices of all goods in that basket for that year , 2014

Step(4)....calculate CPI as...

CPI==price of goods in year 2014/price of goods in year2000x100


So inflation =487-100=387 percent

I think now you can understand.

Nov 7th, 2015

Suppose that the closed economy of an island H is described by the following equations: GDP (Y) = 10000, government expenditures (G)= 600, (Taxes (T) = 2000, Consumption (C) =400 + 3/4 (Y-T), and investment (I) = 200 -1400 r


1. Private Sving

2. Public Saving

3.National Saving

4. Equilibrium interest rate

5. What can you you conclude about the economy of island H?

Nov 7th, 2015

Hi, before attempting this I want to clear one thing , will I be paid for the correct answer? Also what is r in this question, it is not clear to me, waiting for your reply, thanks

Nov 7th, 2015

Yes you will be paid, and concerning the r in the problem thats what i see. I typed everything that i saw on the paper i have. How much do you require to be paid let me know

Nov 7th, 2015

Ok, I can try...

In closed economy, if Y is the national income(GDP), C is the consumption, I is the investment, and G is the government purchases, then....


National saving can be thought as the amount of remaining money that is not consumed or spent by government.In simple model of closed economy, anything which is not used is to be invested, so

National saving=Y-C-G

National saving should be split into private saving and public saving.A new term T is tax payed by consumers that goes directly to the government as shown here....

Y-C-G+T-T=I       We add T and subtract T , so eq does not change


Now (Y-T-C) is called private saving

(T-G) is called the public savings , also the government revenue minus government expenditure.This is also known as Budget surplus.




Government expenditure G=600

Taxes=2000,         Investment(I)=200-1400r

Consumption (C)=400+3/4(Y-T)


So C=6400

Now private saving=Y-T-C=10,000-2000-6400=10,000-8400=1600

Public saving=T-G=2000-600=1400

National Saving=Private saving +Public saving=1600+1400=3000=I

Now r is the equilibrium interest rate, we can calculate it as follows...

Using I=200-1400r   

Substituting the value of I, we get...



r=-2800/1400=-2    Is same as -200percent

The negative value of r is not a interesting figure, I am wondering whether eq I=200-1400r is written correct, pl check it again.

About economy of the island H, I can say that when revenue of government is more than expenditure, which is public saving is 1400 , so there is Budget Surplus, this the situation when income exceeds the expenditure, it means government is being run efficiently, economy of the island is good, a Budget surplus might be used to pay off debts, for the development of the island.

I think this will help you, regarding payments, whatever you feel ok, you can pay ,I will appreciate that.

Nov 7th, 2015

Thanks for the answer

Nov 7th, 2015

When and how much you are paying for the answer.?

Nov 7th, 2015

How do i pay for it, i dont see the link

Nov 8th, 2015

I just payed for it

Nov 8th, 2015

Can anyone help me with a spreadsheet assignment

Nov 18th, 2015

Please first give me the question, then only I can tell whether I can do it or not

Nov 18th, 2015

Its a spreadsheet assignment that needs to uplpoaded

Nov 18th, 2015

Its about 22 questions on what functions to use to fill out a worksheet/ spreadsheet

Nov 18th, 2015

are you familiar with spreadsheet assignments or should i ask another tutor

Nov 18th, 2015

You can go with another tutor, if you have any Algebra, Arithmetic, Geometry problem, you can ask me.

Nov 18th, 2015

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