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Intro to Price index

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2 Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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The formula Nominal means current Nominal GDP = Price X Output

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index x $ $32 x x x x Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $ $32 Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year YIIIIKES!!!!!!!!!!! (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2 / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2 / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**The formulae Price Index = nominal price / base year price (times 100)**

in this case (3/3 = 1) X 100 = 100 Real GDP = nominal GDP / the index (in hundreds)

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2 / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2/3 / /3 /3 /3 Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2/ / / / / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2/ $ / / / / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2/ $32/ $ / / / / / / / / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2/ $32/ $ / / / / / / / / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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**Did I use a calculator? No**

I cheated, or used a short cut while the index is 166.6, in hundreds it is 1.66 so the fraction value is 5/3 - I just inverted and multiplied 180 X 3/5 3 X 180 = 540 and 540 / 5 = 180

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**Units of Price Nominal Real Price Year output per unit GDP GDP Index **

refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Units of Price Nominal Real Price Year output per unit GDP GDP Index $2/ $32/(2/3) $ / / / /(4/3) / /(5/3) / / Compute (a) nominal GDP for years 1 thru 5 (b) real GDP for year 4 (c) if year 2 is the base year, give the price index for years through 5

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15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 £1 Million £500,000 £250,000 £125,000 £64,000 £32,000 £16,000 £8,000 £4,000 £2,000 £1,000 £500 £300 £200 £100 Welcome.

15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 £1 Million £500,000 £250,000 £125,000 £64,000 £32,000 £16,000 £8,000 £4,000 £2,000 £1,000 £500 £300 £200 £100 Welcome.

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