Section I - Multiple Choice (3 Viewers)

[absorber]

For all of you that are wondering what question 12 was:

Year/Nominal GDP/CPI/HDI

1/6000/130/0.61

2/6800/150/0.76

According to the data, which statement is correct for this economy?
a) Real GDP has increased and the quality of life has improved
b) Real GDP has increased and the quality of life has declined
c) Real GDP has decreased and the quality of life has improved
d) Real GDP has decreased and the quality of lie has declined

This is how i worked it out, and what i believe to be right.

The Real GDP Formula is:

CPI previous year
--------------------- x GDP
CPI current year

Therefore:
130
----- x 6000 = 5200
150

This means that REAL GDP has decreased from 6000 to 5200, therefore the answer is C

Anyone disagree with this? Im interested to know because since people are saying its A it will haunt me.

I'm pretty sure it should be (CPI current year)/(CPI previous year) to find the rate of inflation... Basically, no, that's wrong is my understanding.

 

[pinkkate1406]

i dont reli understand the maths ppl are throwing around but isnt inflation formula this:

cpi current yr -cpi previous yr / cpi previous yr

??!
but thats not even the maths u need for that q??
u need the nominal gdp formula which is

nominal gdp x base yr/cpi

?? right?

 

[haruandyuki]

i dont reli understand the maths ppl are throwing around but isnt inflation formula this:

cpi current yr -cpi previous yr / cpi previous yr

??!
but thats not even the maths u need for that q??
u need the nominal gdp formula which is

nominal gdp x base yr/cpi

?? right?

You would use the nominal rate of economic growth formula if it asked for the nominal rate of economic growth, but it asked for REAL GDP which means you need to adjust it for inflation.

 

[pinkkate1406]

You would use the nominal rate of economic growth formula if it asked for the nominal rate of economic growth, but it asked for the REAL rate of GDP which means you need to adjust it for inflation.

isnt that what my nominal gdp formula does.... it accounts for inflation

 

[haruandyuki]

isnt that what my nominal gdp formula does.... it accounts for inflation

im 99% sure it doesnt, theres two different formulas: Nominal rate of economic growth and Real GDP formula.

 

[bell531]

2006, Q3 has a very similar question on Real GDP. Can someone please look it up to stop this bickering. The answer to the 2006 question is B, so I think that means the answer for today is that it decreases.

 

[cp3]

1.A
2.B
3.C
4.B
5.A
6.B
7.C
8.A
9.A
10.D
11.B
12.C
13.D
14.A
15.C
16.B
17.A
18.D
19.A
20.A

They were my answers, what you think?

 

[haruandyuki]

2006, Q3 has a very similar question on Real GDP. Can someone please look it up to stop this bickering. The answer to the 2006 question is B, so I think that means the answer for today is that it decreases.

Hrm if the answer is B, i think that means the GDP increased for question 12 in the paper, meaning i got it wrong.

Today i used CPI previous year over CPI current year... but in order to get answer B for the 2006 paper looks like its the opposite way around, (CPI current year over CPI previous year). And if this is applied to question 12, the Real GDP increases.

Bummer. Anyone else get this?

 

[La Bomba]

thats what ive been trying to say for the past 2 pages. but yehh haru i got a, the gdp increasing.

 

[daniel81]

the person who confirmed this was someone who got 99% in the trial. he said it was designed to trick people, he is expected to come close to the top of the state. so ramana bro. c is wrong mate

Top rank at my school (baulkham hills) reckons C.

And in any case, comparing 2 years:

Real GDP = Nominal GDP x CPI(prev year)/CPI(same year)

Real GDP = 6800 x (130/150)

Real GDP = 5833 WHICH IS LOWER THAN 6000.


And heres the page from my book where ive got notes on this question. We worked through the older one in class, our teacher was expecting one of these questions in this years test.

http://img525.imageshack.us/img525/6398/imggc.jpg

 

[haruandyuki]

thats what ive been trying to say for the past 2 pages. but yehh haru i got a, the gdp increasing.

ahah sorry! the formula i've been using is so embedded in my mind that i can't believe it wasn't right. i still hope it is, and the answer is C, but it doesn't look like it.

Also did anyone have troubles with the Multiplier question (Number 18), i'm usually fine at multiplier questions but i've never seen one like that before? I just guessed answer D, ($800m), just from the pattern of the provided numbers.

 

[La Bomba]

yes bro but as 130 is the base year bro, u divide 6000 by 130 then times by 100.

 

[absorber]

That's what I got

 

[La Bomba]

i also got D for the multiplier question.

 

[haruandyuki]

How did you come up with D?

 

[La Bomba]

well i was unsure as to whether to use the multiplier, so i instead found the trend, that each year that consumption raises 50, income raises 100, so i assumed wen it raised to 300, that income would be 800. not sure if this is right though.

 

[RaMaNa]

i also got D for the multiplier question.

hahaha dude i think u might b right bout that question 12. reason i got it wrong was cause i learnt the formula wrong i thought it was

(nominal GDP) x (100/CPI)
hahaha sorry

 

[La Bomba]

yehhh thats ok man. yeh lots of ppl wil get that question wrong.

 

[Kakashi Hatake]

um for 19) i think it is d. sorry guys
unemployed means actively seeking work, but it clearly says "not actively" and also that they just lost their jobs, so they wouldn't be included into the unemployed.

dont worry i got this wrong too

 

[AnandDNA]

um for 19) i think it is d. sorry guys
unemployed means actively seeking work, but it clearly says "not actively" and also that they just lost their jobs, so they wouldn't be included into the unemployed.

dont worry i got this wrong too

But Labour force got smaller. Unemployment rate is unemployed/labour force

hence unemployment rate increased

im probably wrong as no one seems to support me