hsc qn (1 Viewer)
- Thread starter redom
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ilovecommunism
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回复: hsc qn
lol... can you type that question up?redom said:
haha that makes sense...here it is
YEAR Money GDP (bn) CPI
1 600 100
2 750 110
3 820 125
4 900 130
What is the real GDP in Year 3 compared to the base year.
its multiple choice, and the answerr is $656 bn
i managed to get the answer by playing with the calculator, but what i did doesnt make good sense.
anyy help please?
YEAR Money GDP (bn) CPI
1 600 100
2 750 110
3 820 125
4 900 130
What is the real GDP in Year 3 compared to the base year.
its multiple choice, and the answerr is $656 bn
i managed to get the answer by playing with the calculator, but what i did doesnt make good sense.
anyy help please?
gnrlies
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Best way to think of this is as follows....
In most economies we have inflation, which as we know - refers to increasing prices. If I earn $100 in one year, and $100 in the next, despite the fact that I am still earning the same income; my purchasing power has decreased, as prices rise under inflation. So I might have been able to purchase 100 cans of softdrink in year one, whereas in year two i might only be able to purchase 90.
This is what we mean by real Vs nominal (or money) gdp. Nominal gdp simply refers to GDP in its amount irrespective of price rises. Real GDP however, scales nominal gdp down, so that it takes into account the rise in prices (so that you can appropriately compare the two GDP figures on an even playing field).
In order to calculate real GDP, we need to "weight" or "scale" nominal GDP based on relative prices - that is prices in year one, compared to prices in year two. The CPI is a tool we use to describe the price level in a given year (based on a basket of goods). So in order to calculate real GDP, we multiply nominal gdp by the ratio of prices between the two years.
In this case, we use the following:
CPI Year 1 / CPI Year 3 = 100 / 125 = 0.8
This is a number that reflects the rise in prices. In other words, $1 of currency now, can buy what $0.8 could in year 1. This reflects inflation.
In order to calculate real GDP, we need to multiple this number (reflecting relative prices) by nominal GDP:
0.8 x 820 = $656
This real income ($656) can be directly compared to the base year's nominal income (i.e. 600). So we can say there has been a rise in real gdp as of course 656 > 600. However, we cannot compare it directly to years 2 and 4 as we only know nominal GDP for these years. We would need to do the same thing (multiply nominal income by relative prices) for these years in order to make a fair comparison.
The final point to make, is that the question has asked you to use the base year. In this case, you would use year 1. The base year simply refers to the year you are comparing it to. Because the CPI for year one is 100 we know that this is the base year. Any year could be the base year. For example year 1 might be 90, year 2 might be 100, and year 3 might be 115. In this case year 2 is the base year with the CPI for years 1 and 3 being measured relative to year 2 (which is 100).
In most economies we have inflation, which as we know - refers to increasing prices. If I earn $100 in one year, and $100 in the next, despite the fact that I am still earning the same income; my purchasing power has decreased, as prices rise under inflation. So I might have been able to purchase 100 cans of softdrink in year one, whereas in year two i might only be able to purchase 90.
This is what we mean by real Vs nominal (or money) gdp. Nominal gdp simply refers to GDP in its amount irrespective of price rises. Real GDP however, scales nominal gdp down, so that it takes into account the rise in prices (so that you can appropriately compare the two GDP figures on an even playing field).
In order to calculate real GDP, we need to "weight" or "scale" nominal GDP based on relative prices - that is prices in year one, compared to prices in year two. The CPI is a tool we use to describe the price level in a given year (based on a basket of goods). So in order to calculate real GDP, we multiply nominal gdp by the ratio of prices between the two years.
In this case, we use the following:
CPI Year 1 / CPI Year 3 = 100 / 125 = 0.8
This is a number that reflects the rise in prices. In other words, $1 of currency now, can buy what $0.8 could in year 1. This reflects inflation.
In order to calculate real GDP, we need to multiple this number (reflecting relative prices) by nominal GDP:
0.8 x 820 = $656
This real income ($656) can be directly compared to the base year's nominal income (i.e. 600). So we can say there has been a rise in real gdp as of course 656 > 600. However, we cannot compare it directly to years 2 and 4 as we only know nominal GDP for these years. We would need to do the same thing (multiply nominal income by relative prices) for these years in order to make a fair comparison.
The final point to make, is that the question has asked you to use the base year. In this case, you would use year 1. The base year simply refers to the year you are comparing it to. Because the CPI for year one is 100 we know that this is the base year. Any year could be the base year. For example year 1 might be 90, year 2 might be 100, and year 3 might be 115. In this case year 2 is the base year with the CPI for years 1 and 3 being measured relative to year 2 (which is 100).
gnrlies
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NPredom said:
I think the problem with textbooks / workshops is that they are generic tools. With economics, different concepts are easier / harder depending on the person. Some people have a better ability to think abstractly and do better in more theoretical concepts, while others think more mathematically and fare better in other areas (such as interpreting economic models). With economics you need both, and textbooks struggle to adequately provide for both 'types' of students. This is not their fault as a 300 page textbook would likely turn into a 600 page textbook, and confuse students even more, but I agree, it does make it difficult when textbooks "assume" that students know what is being said.
The best way to overcome this is to have a variety of sources. Purchasing a second textbook can be very advantageous. For example dixon is good at looking at things in a very simplistic and general way (often simplifying things that makes it easy to understand) whilst riley tends to provide a more detailed but often complicated approach. A good study technique is to use both. Study dixon to get the main ideas, then study riley to get a complete picture. Fortunately dixon is more relevant given the HSC course so you can use that to make sure you know all that is needed (as often riley goes beyond the HSC)
This being said, you should study economics because you are passionate about it, not necessarily to get the best HSC mark (or uai) as of course no university, or employer gives a shit about your HSC mark or uai once you have done a semester at university (that is, you can go to uni doing another course and then change degrees, based on your first semester marks - which are in subjects that will count towards your preferred degree).