Table 10-3
The table below reports nominal and real GDP for the U.S. from 1929 to 1932. $$\begin{array} { c c c }
\hline \text { Year } & \begin{array} { c }
\text { Nominal } \
\text { GDP }
\end{array} & \text { Real GDP } \
\hline 1929 & 103.6 & 977 \
1930 & 91.2 & 892.8 \
1931 & 76.5 & 834.9 \
1932 & 58.7 & 725.8 \
\hline
\end{array}$$
-Refer to Table 10-3. What is the GDP deflator and the inflation rate for 1932?

Question

Table 10-3
The table below reports nominal and real GDP for the U.S. from 1929 to 1932. $$\begin{array} { c c c } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal } \
\text { GDP }
\end{array} & \text { Real GDP } \
\hline 1929 & 103.6 & 977 \
1930 & 91.2 & 892.8 \
1931 & 76.5 & 834.9 \
1932 & 58.7 & 725.8 \
\hline
\end{array}$$
-Refer to Table 10-3. What is the GDP deflator and the inflation rate for 1932?

Quizplus · Accepted Answer

The GDP deflator is calculated as (Nominal GDP/Real GDP) x 100.

For 1932, the nominal GDP is 58.7 and the real GDP is 725.8.

GDP deflator = (58.7/725.8) x 100 = 8.09.

To calculate the inflation rate, we need to find the percentage change in the GDP deflator from the previous year.

Inflation rate = ((New GDP deflator - Old GDP deflator) / Old GDP deflator) x 100.

For 1932, the previous year is 1931.

Old GDP deflator = (76.5/834.9) x 100 = 9.16.

Inflation rate = ((8.09 - 9.16) / 9.16) x 100 = -11.7 (rounded to one decimal place).

Therefore, the answer is A) 8.09, -11.7.

Table 10-3 the Table Below Reports Nominal and Real GDP

Table 10-3
the Table Below Reports Nominal and Real GDP