1. Intro to
Price index

2. 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

3. The formula
Nominal means current
Nominal GDP = Price X Output

4. 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

5. 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

6. 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

7. 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

8. 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)

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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