ECO403 Assignment 1 Solution Fall 2012

Commodities	1986		1987
Price	Quantity	Price	Quantity
Fish	10	50	13	70
Milk	5	100	7	100
Meat	7	150	10	155
Rice	6	70	10	90
Fruits	7	90	14	90

Requirements:
With the help of above data, calculate Togo’s:
Nominal GDP : Y = P x y
y = quantity
P = price
a) Nominal GDP for year 1986

Commodities	Nominal GDP
Fish	500
Milk	500
Meat	1050
Rice	420
Fruits	630

b) Nominal GDP for year 1987

Commodities	Nominal GDP
Fish	910
Milk	700
Meat	1550
Rice	900
Fruits	1260

c) Real GDP for year 1987
Real GDP y = Y/P
Where we multiple each year’s Quantities (y) with the previous year’s Prices (P)

Commodities	Nominal GDP
Fish	700
Milk	500
Meat	1085
Rice	540
Fruits	630

d) GDP deflator for the year 1987
GDP Deflator = (Nominal GDP/Real GDP) x 100

Product	GDP Deflator
Fish	130
Milk	140
Meat	142.86
Rice	166.67
Fruits	200

e) Labor force for year 1986 and 1987
Labor force = employed + unemployed
1986: 90 lac employed and 7 lac unemployed
Labor Force = 97 lac
1987: 87 lac employed and 11 lac unemployed
Labor Force = 98 lac 

Real GDP = Nominal GDP/CPI*100

Nominal GDP = ∑ p_tq_t