Question

Given the information

Product. Qty produced price. Qty produced. Price

(kg) 1995. 1995. (kg). 2000

Maize. 50 N20 100 N30

Rice. 80 N40 160 N60

Calculate:

1. The GNP at market 2000 prices, GNP at current 1995 prices GNP at constant 1995 prices in year 2000
2. The GNP price deflator (Nominal GNP)/Real GNP

Answer 1

i.

GNP = Quantity $\times$ price year

$1995 \\ (50\times 20) + (80\times 40) = N4200\\ 2000 \\ (1000\times 30) + (160\times 60) =N12600\\$

ii.

GNP for 2000 year using 1995 as the base year.

GNP = Quantity $\times$ price of the base year

$(1000\times 20) + (160\times 40) =N8400\\$

iii.

GNP deflator = [GNP for 2000 $\div$ GNP for 2000 year using 1995 as the base year]$\times 100$

$2000\\ (\frac{12600 } {8400}) \times 100 = 150\\$