Nominal GDP, Real GDP, GDP deflator, and Economic growth rate #

Calculate the Nominal GDP, Real GDP, GDP deflator, and Economic growth rate for the year 2019, 2022, and 2021 #

Nominal GDP #

$NGDP=\sum Price\ast Quantity$

NGDP​19​​=(P​R​​∗Q​R​​+P​S​​∗Q​S​​+P​B​​∗Q​B​​)
$=(1\ast 1000)+(2\ast 500)+(1\ast 200)$
$=1000+1000+200$
$=\$2200$

NGDP​20​​=(P​R​​∗Q​R​​+P​S​​∗Q​S​​+P​B​​∗Q​B​​)
$=(2\ast 1100)+(4\ast 600)+(3\ast 300)$
$=2200+2400+900$
$=\$5500$

NGDP​21​​=(P​R​​∗Q​R​​+P​S​​∗Q​S​​+P​B​​∗Q​B​​)
$=(3\ast 1200)+(6\ast 700)+(5\ast 400)$
$=3600+4200+2000$
$=\$9800$

Real GDP #

RGDP=∑​Price​¯​​∗Quantity[​Price​¯​​ is the price of base year. (Usually earlieast year)]

RGDP​19​​=(​P​¯​​​R​​∗Q​R​​+​P​¯​​​S​​∗Q​S​​+​P​¯​​​B​​∗Q​B​​)
$=(1\ast 1000)+(2\ast 500)+(1\ast 200)$
$=1000+1000+200$
$=\$2200$

RGDP​20​​=(​P​¯​​​R​​∗Q​R​​+​P​¯​​​S​​∗Q​S​​+​P​¯​​​B​​∗Q​B​​)
$=(1\ast 1100)+(2\ast 600)+(1\ast 300)$
$=1100+1200+300$
$=\$2600$

RGDP​21​​=(​P​¯​​​R​​∗Q​R​​+​P​¯​​​S​​∗Q​S​​+​P​¯​​​B​​∗Q​B​​)
$=(1\ast 1200)+(2\ast 700)+(1\ast 400)$
$=1200+1400+400$
$=\$3000$

GDP deflator #

GDP deflator is the ratio of the price level from nominal GDP to Real GDP times 100.

GDP deflator=​RGDP​​NGDP​​∗100

GDP deflator of 2020 is,
GDP deflator​20​​=​RGDP​20​​​​NGDP​20​​​​∗100
=​2600​​5500​​∗100
$=2.115384\ast 100$
$=211.5384$

GDP deflator of 2021 is,
GDP deflator​21​​=​RGDP​21​​​​NGDP​21​​​​∗100
=​3000​​9800​​∗100
$=3.266667\ast 100$
$=326.6667$

Economic growth rate #

Economic growth rate =​RGDP of previous year​​RGDP of current year − RGDP of previous year​​ ∗100

Economic growth rate of 2020 is,
Economic growth rate =​RGDP​19​​​​RGDP​20​​− RGDP​19​​​​ ∗100
 =​2200​​2600−2200​​ ∗100
$=0.181818\ast 100$
$=18.1818$

Economic growth rate of 2021 is,
Economic growth rate =​RGDP​20​​​​RGDP​21​​− RGDP​20​​​​ ∗100
 =​2600​​3000−2600​​ ∗100
$=0.153846\ast 100$
$=15.3846$