var imagesXXXlarge = "krugmanap2e-ch11-fig-1,,,"; var pilgrimage = ",,,,"; var imagesXlarge = ",,,,,"; var imagesLarge = ",,,,"; var imagesSmall = ",,,,"; var imagesMedium = "krugmanap2e-ch11-fig-5,,,"; xBookUtils.showAnswers['krugmanapecon2e_mod11_cyu_1a'] = "In 2013 nominal GDP was (1,000,000 X $0.40) + (800,000 X $0.60) = $400,000 + $480,000 = $880,000. The total value of sales of french fries in 2014 was 900,000 X $0.50 = $450,000. The total value of sales of onion rings in 2014 was 840,000 X $0.51 = $428,400. Nominal GDP in 2014 was $450,000 + $428,400 = $878,400. To find real GDP in 2014, we must calculate the value of sales in 2014 using 2013 prices: (900,000 x $0.40) + (840,000 x $0.60) = $360,000 + $504,000 = $864,000."; xBookUtils.showAnswers['krugmanapecon2e_mod11_cyu_1b'] = "A comparison of nominal GDP in 2013 to nominal GDP in 2014 shows a decline of (($880,000 - $878,400)/$880,000) x 100 = 0.18%. But a comparison using real GDP shows a decline of (($880,000 - $864,000)/$880,000) x 100 = 1.8%. That is, a calculation based on real GDP shows a drop 10 times larger (1.8%) than a calculation based on nominal GDP (0.18%): in this case, the calculation based on nominal GDP underestimates the true magnitude of the change because it incorporates both quantity changes and price changes."; xBookUtils.showAnswers['krugmanapecon2e_mod11_cyu_2a'] = "Real GDP increases as the result of increased output. "; xBookUtils.showAnswers['krugmanapecon2e_mod11_cyu_2b'] = "There is no change in real GDP; infl ation only affects nominal GDP."; xBookUtils.showAnswers['krugmanapecon2e_mod11_cyu_2c'] = "Real GDP increases as a result of the new spending."; xBookUtils.showAnswers['krugmanapecon2e_mod11_cyu_2d'] = "There is no change in real GDP, which does not capture volunteer work."; xBookUtils.showAnswers['krugmanapecon2e_mod11_fr_2_rubric'] = "
Rubric for FRQ 2 (6 points)
1 point: Hungry—1,000, 2,000 (In Year 1, Hungry made $10,000/$10 = 1,000 pizzas. In Year 2, Hungry made $20,000/$10 = 2,000 pizzas.)
1 point: Thirsty—1,000, 1,500 (In Year 1, Thirsty made $10,000/$10 = 1,000 smoothies. In Year 2, Thirsty made $30,000/$20 = 1,500 smoothies.)
1 point: Hungry—The real GDP in Hungry in Year 2 is $10 × 2,000 = $20,000.
1 point: Thirsty—The real GDP in Thirsty in Year 2 is $10 × 1,500 = $15,000.
1 point: Hungry—The increase of $10,000 or 100% in Hungry exceeded the increase of $5,000 or 50% in Thirsty.
1 point: Hungry—In Year 1, the real GDP per capita was $10,000/5 = $2,000 in each country. In Year 2, the real GDP per capita in Hungry was $20,000/16 = $1,250 and the real GDP per capita in Thirsty was $15,000/10 = $1,500. Thus, the decrease of $750 in Hungry exceeded the decrease of $500 in Thirsty.
"; // FYI Miracle in Venezuela? var assetsource = 'Source: World Bank.'; var html = $('#krugmanap2e-ch11-p-39').html(); html = html.replace(/<\/p>/,assetsource + ''); $('#krugmanap2e-ch11-p-39').html(html); //alert($('#krugmanap2e-ch11-p-39').html());