### Compute the value of the price index for gdp

Assignment Help Macroeconomics
##### Reference no: EM1334465

Use the following data to answer questions 1-3 (be sure to provide all calculations).

Quanity Prices

Year CD's Tennis Racquets CD's Tennis Racquets
2005 90 180 \$18 \$100
2006 100 190 \$20 \$110

Calculate the value of the price index for GDP for 2006 using 2005 as the base year. By what percent did prices increase?

Now calculate real GDP for 2005 and 2006 using 2006 prices. By what percent did real GDP grow?
Review the GDP information for the past few years from the Bureau of Economic Analysis's Website. Provide a brief summary of the GDP trends over that timeframe and discuss two or three events which may have caused these trends.
Be sure to show your work for each calculation.

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