Answer:
a. The nominal GDP 2016 = $43.96 billion
The real GDP 2016 = $43.96 billion
The nominal GDP 2017 = $50.46 billion
The real GDP 2017 = $47.36 billion
b. The growth rate is of nominal GDP is 14.79%
c. The growth rate is of real GDP is 7.73%
d. The growth rate in prices is 6.55%
e. The increase in nominal GDP in part a is due to a change in both quantity and prices
Explanation:
a. The amount contributed by Ford to U.S. real and nominal GDP from the sales of the two models 2016 and 2017 are given as follows;
The nominal GDP 2016 = $24,485 × 307,069 + $44,400 × 820,799 = $43.96 billion
The real GDP 2016 = The nominal GDP 2016 = $43.96 billion
The nominal GDP 2017 = $24,645 × 308,296 + $47,800 × 896,764 = $50.46 billion
The inflation for Escape = ($24,645 - $24,485)/$24,485× 100 = 0.65%
GDP deflator for Escape = 100 + 0.65 = 100.65
The inflation for F-series = ($47,800 - $44,400)/$44,400× 100 = 7.66%
GDP deflator for F-series = 100 + 7.66 = 107.66
The real GDP 2017 = ($24,645 × 308,296)×100/100.65 + ($47,800 × 896,764)×100/107.66 = $47.36 billion
b. The growth rate is of nominal GDP is ((The nominal GDP 2017 - The nominal GDP 2016)/(The nominal GDP 2016)) × 100
The growth rate is of nominal GDP = (($50.46 billion - $43.96 billion)/$43.96 billion) × 100 = 14.79%
c. The growth rate is of real GDP is ((The real GDP 2017 - The real GDP 2016)/(The real GDP 2016)) × 100
The growth rate is of real GDP = (($47.36 billion - $43.96 billion
)/$43.96 billion) × 100 = 7.73%
d. The growth rate in prices is given as follows;
Price Deflator = (Nominal GDP/(Real GDP))×100
Price Deflator = ($50.46 billion/$47.36 billion)×100 = 106.55
The growth rate of prices = 106.55 - 100 = 6.55%
e. The increase in nominal GDP in part a is due to a change in both quantity and prices
Quantity increased from 307,069 in 2016 to 308,296 in 2017 for Escape SUVs
Quantity increased from 820,799 in 2016 to 896,764 in 2017 for F-series trucks
Price increased from $24,485 in 2016 to $24,645 in 2017 for Escape SUVs.
Price increased from $44,400 in 2016 to $47,800 in 2017 for F-series trucks.
