Chapter 5: Problems Solutions
14th edition
#1. (a) Stage 1: $6,000
Stage 2: $13,000
Stage 3: $5,000
Stage 4: $28,000
(b) Contribution to GDP is $52,000
(c) Contribution to GDP = $33,000 = Stage 3 + Stage 4 = 5,000 + 28,000
Or
=52,000- (6,000 + 13,000)
#2. Nominal GDP increases by 4%
#4. (a) GDP = C +Ig + G + (X- M) = 200 + 40 + 80 + (50- 70) = $300
(b) In = Ig – D = 40 – 20 = $20
(d) i- No change in Real GDP
ii- Nominal GDP doubles
15th edition
#1. (a) Stage 1: $1,000
Stage 2: $1,500
Stage 3: $3,500 Stage 4: $6,000
(b) $ 12,000 (Stage 4 final good sold to consumer) = Sum. of Value added=
$1000+$1500 + $3500 +$6,000= $12,000
(c) Stages 3 and 4 only: $3,500 + 6,000 = $9,500 or 12,000 – (1,000+1,500)
#2. Nominal GDP next year = $1020
Price Level next year= 103
Real GDP next year = 1020/103 x100 = $990.3
#4. (a) no change in Real GDP (b) Nominal GDP doubles
#5. (a) GDP = C +Ig + G + (X- M) = 200 + 30 + 80 + (50 – 60) = $300
(b) In = Ig – D = 30 – 20 = $10