The table below was compiled using data from the BLS website. Use these data to answer the associated questions. Be sure to answer the questions as completely as you can. If calculations are requested, show your work!
|
|
2000
|
2001
|
2002
|
2003
|
2004
|
|
Nominal GDP
|
9817
|
10128
|
10469.6
|
10971.2
|
11734.3
|
|
Real GDP
|
9817
|
...............
|
..............
|
10320.6
|
10755.7
|
|
GDP Deflator
|
100
|
102.4
|
104.2
|
...............
|
.............
|
|
Growth rate of nominal GDP
|
|
3.2%
|
..................
|
4.8%
|
..................
|
|
Growth rate of real GDP
|
|
...................
|
1.6%
|
...................
|
4.2%
|
|
CPI
|
172.2
|
177.1
|
179.9
|
184
|
188.9
|
|
Inflation rate using GDP deflator
|
|
1.7%
|
..................
|
2.0%
|
..................
|
|
Inflation rate using CPI
|
|
.................
|
2.8%
|
..................
|
2.7%
|
1. How is the real GDP calculated from the given data? Fill in the missing values of real GDP in the table.
2. How is the growth rate of GDP calculated from the given data? Fill in the missing values of the growth rate of nominal and real GDP in the table.
3. What's the difference between nominal GDP and real GDP? Which one is better for measuring economic well-being?
4. How is the GDP Deflator calculated from the data given? Fill in the missing values of GDP deflator in the table.
5. Explain how to calculate the annual inflation rate.
6. Calculate the annual inflation rate using the CPI.
7. Calculate the annual inflation rate using the GDP deflator.
8. What's the key difference between these two measures of inflation?