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Q1. Suppose nominal GDP in 1999 was $100 billion also in 2001 it was $260 billion. The general price index in 1999 was 100 also in 2001 it was 180. Between 1999 also 2001 the real GDP rose by illustrate what percent? 1st, we need to adjust the 2001 GDP to 1999 prices. Since nominal GDP = P x real GDP, we can convert nominal GDP to real GDP using the formula real GDP = nominal GDP/P. So we have: 260/1.8= 144.44
Q2. Suppose QXd = 10,000 - 2 PX + 3 PY - 4.5M, where PX = $100, PY = $50 also M = $2,000. Illustrate what is the own-price elasticity of demand?
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