Goods 1981 1983 1981 1983

P0 p1 q0 q1 P0*q0
A 50 75 25 45 1250
B 60 75 56 33 3360
C 200 240 10 12 2000
D 80 100 80 120 6400
E 800 1000 3 5 2400

SUM 15410

Price Index

Laspeyre's L=P1*q0/p0*q0 1.2637897

Paasche's P=p1*q1/p0*q1 1.2718735

Fisher F=(L*P)^1/2 1.2678252

Dorbish and Bowley (L+P)/2 1.2678316

Marshall-Edgeworth Price Index (p1*(q0+q1)/2)÷(p0((q0+q1)/2) 1.2683782

TIME REVERSAL TEST

Laspeyre's L=(p1qo/p0q0)*(poq1/p1q1) 0.9936443 ≠1

Paasche's P=(p1*q1/p0*q1)(p0*q0/p1*q0) 1.0063964 ≠1

Fisher F=(L*P)^1/2 1
Note Fisher Index satisfied both time and factor reversal tests
P1*q0 p1*q1 p0*q1 (q0+q1)/2 p1*(q0+q1)/2 p0*(q0+q1)/2
1875 3375 2250 35 2625 1750
4200 2475 1980 44.5 3337.5 2670
2400 2880 2400 11 2640 2200
8000 12000 9600 100 10000 8000
3000 5000 4000 4 4000 3200

19475 25730 20230 194.5 22602.5 17820

QUANTITY INDEX

L=poq1/p0q0 1.312783906554

P=p1q1/p1q0 1.321181001284

F=(poq1/p0q0)*p1q1/p1q0)^1/2 1.316975761406

FACTOR REVERSAL TEST

Price Index * Quantity Index

L=(P1*q0/p0*q0)*(poq1/p0q0) 1.659082841022 ≠ p1q1/poqo = 1.669695

P=(p1*q1/p0*q1)*(p1q1/p1q0) 1.680375045132 ≠ p1q1/p0q0 = 1.669695

F=(L*P)^1/2 1.669695003245 = p1q1/p0q0 = 1.669695

Consider the following table which recorded quntity of goods and their respective prices
2019
Goods p0 q0
1 7.1442162 254.28843
2 12.147528 264.29506
3 20.269248 280.5385
4 30.2452 300.4904
5 36.676623 313.35325
6 25.969483 291.93897
7 36.863252 313.7265
8 13.736961 267.47392
9 35.484367 310.96873
10 20.528795 281.05759
11 36.045343 312.09069
12 54.091059 348.18212
13 32.465436 304.93087
14 30.099067 300.19813
15 26.19663 292.39326
16 27.402642 294.80528
17 17.99608 275.99216
18 11.403107 262.80621
19 34.632182 309.26436
20 22.924131 285.84826
21 29.435522 298.87104
22 22.187327 284.37465
23 29.561146 299.12229
24 21.492518 282.98504
25 18.64223 277.28446
26 38.033612 316.06722
27 43.40386 326.80772
28 26.097768 292.19554
29 38.165296 316.33059
30 21.416485 282.83297
31 22.703283 285.40657
32 30.557577 301.11515
33 30.99958 301.99916
34 14.080341 268.16068
35 33.157129 306.31426
36 32.697175 305.39435
37 55.260306 350.52061
38 19.051162 278.10232
39 26.259066 292.51813
40 31.885712 303.77142
2020
p1 q1
17.139459 354.28843
4.6311788 364.29506
15.67312 380.5385
40.612999 400.4904
56.691558 413.35325
29.923708 391.93897
57.158129 413.7265
0.6575964 367.47392
53.710917 410.96873
16.321988 381.05759
55.113358 412.09069
100.22765 448.18212
46.163589 404.93087
40.247667 400.19813
30.491574 392.39326
33.506606 394.80528
9.9901991 375.99216
6.4922323 362.80621
51.580454 409.26436
22.310328 385.84826
38.588805 398.87104
20.468317 384.37465
38.902865 399.12229
18.731296 382.98504
11.605575 377.28446
60.08403 416.06722
73.50965 426.80772
30.244419 392.19554
60.413239 416.33059
18.541211 382.83297
21.758208 385.40657
41.393943 401.11515
42.49895 401.99916
0.2008529 368.16068
47.892822 406.31426
46.742937 405.39435
103.15076 450.52061
12.627904 378.10232
30.647666 392.51813
44.714281 403.77142
 41 26.691326 293.38265 31.728316 393.38265
42 41.974089 323.94818 69.935222 423.94818
43 25.355893 290.71179 28.389732 390.71179
44 30.771479 301.54296 41.928697 401.54296
45 29.315185 298.63037 38.287961 398.63037
46 12.917416 265.83483 2.7064606 365.83483
47 25.124563 290.24913 27.811407 390.24913
48 30.958846 301.91769 42.397115 401.91769
49 25.44857 290.89714 28.621425 390.89714
50 27.444559 294.88912 33.611397 394.88912

a. Find nominal and real GDP of coountry Z

b. Suppose that population in 2019 is 200 Million and in 2020 it is 250 Millio. Find Real GDP percapita

c. Find nominal and real GDP of country Z assuming 2020 is a base year and also find GDP deflator

d. Pick 20 quantities of your choice and formed a basket of goods (each student should has her own basket)

e. Use your basket and calculate

(i) Laspeyre's price index

(ii) Paasche's price index
(iii) Fisher Price Index

(iv) Laspery's quantity index

(v) Paashe's quantity index
(vi) Fisher quantity Index

(vii) Perform time reversal and factor reversal tests on your index numbers.

(viii) based on your price and quantity find inflation rate and growth rate of output

(ix) Calculate inflation rate and growth rate of output without using index numbers. Which method is better? Expa

(x) find( Σ(p1/p0))/50 and give economic interpretation of your result

(xi) find (Σ(q1/q0))/50 and give economic interpretation of your result

ir respective prices of country Z.
DP percapita

as her own basket)

h method is better? Expalin your answer

 Consider the following table which recorded quntity of
goods and their respective prices of country Z. Nominal
2019 2020 Po
Goods p0 q0 p1 q1

1 7.1442162 254.28843 17.139459 354.28843 1816.6916

2 12.147528 264.29506 4.6311788 364.29506 3210.5317
3 20.269248 280.5385 15.67312 380.5385 5686.3043
4 30.2452 300.4904 40.612999 400.4904 9088.3922
5 36.676623 313.35325 56.691558 413.35325 11492.739
6 25.969483 291.93897 29.923708 391.93897 7581.5041
7 36.863252 313.7265 57.158129 413.7265 11564.979
8 13.736961 267.47392 0.6575964 367.47392 3674.279
9 35.484367 310.96873 53.710917 410.96873 11034.529
10 20.528795 281.05759 16.321988 381.05759 5769.7737
11 36.045343 312.09069 55.113358 412.09069 11249.416
12 54.091059 348.18212 100.22765 448.18212 18833.54
13 32.465436 304.93087 46.163589 404.93087 9899.7135
14 30.099067 300.19813 40.247667 400.19813 9035.6836
15 26.19663 292.39326 30.491574 392.39326 7659.7179
16 27.402642 294.80528 33.506606 394.80528 8078.4438
17 17.99608 275.99216 9.9901991 375.99216 4966.7769
18 11.403107 262.80621 6.4922323 362.80621 2996.8074
19 34.632182 309.26436 51.580454 409.26436 10710.5
20 22.924131 285.84826 22.310328 385.84826 6552.8231
21 29.435522 298.87104 38.588805 398.87104 8797.4252
22 22.187327 284.37465 20.468317 384.37465 6309.5134
23 29.561146 299.12229 38.902865 399.12229 8842.3978
24 21.492518 282.98504 18.731296 382.98504 6082.0611
25 18.64223 277.28446 11.605575 377.28446 5169.2007
26 38.033612 316.06722 60.08403 416.06722 12021.178
27 43.40386 326.80772 73.50965 426.80772 14184.717
28 26.097768 292.19554 30.244419 392.19554 7625.6511
29 38.165296 316.33059 60.413239 416.33059 12072.851
30 21.416485 282.83297 18.541211 382.83297 6057.2879
31 22.703283 285.40657 21.758208 385.40657 6479.6661
32 30.557577 301.11515 41.393943 401.11515 9201.3495
33 30.99958 301.99916 42.49895 401.99916 9361.8472
34 14.080341 268.16068 0.2008529 368.16068 3775.7939
35 33.157129 306.31426 47.892822 406.31426 10156.501
36 32.697175 305.39435 46.742937 405.39435 9985.5324
37 55.260306 350.52061 103.15076 450.52061 19369.876
38 19.051162 278.10232 12.627904 378.10232 5298.1723
39 26.259066 292.51813 30.647666 392.51813 7681.2531
40 31.885712 303.77142 44.714281 403.77142 9685.9682
41 26.691326 293.38265 31.728316 393.38265 7830.7722
42 41.974089 323.94818 69.935222 423.94818 13597.43
43 25.355893 290.71179 28.389732 390.71179 7371.2568
44 30.771479 301.54296 41.928697 401.54296 9278.9228
45 29.315185 298.63037 38.287961 398.63037 8754.4044
46 12.917416 265.83483 2.7064606 365.83483 3433.899
47 25.124563 290.24913 27.811407 390.24913 7292.3824
48 30.958846 301.91769 42.397115 401.91769 9347.0234
49 25.44857 290.89714 28.621425 390.89714 7402.9163
50 27.444559 294.88912 33.611397 394.88912 8093.1017
421463.5

Here the increase in GD

d. Pick 20 quantities of your choice and formed a basket of goods (each student should has her own ba

2019 2020
Goods p0 q0 p1 q1
31 22.703283 285.40657 21.758208 385.40657
32 30.557577 301.11515 41.393943 401.11515
33 30.99958 301.99916 42.49895 401.99916
34 14.080341 268.16068 0.2008529 368.16068
35 33.157129 306.31426 47.892822 406.31426
36 32.697175 305.39435 46.742937 405.39435
37 55.260306 350.52061 103.15076 450.52061
38 19.051162 278.10232 12.627904 378.10232
39 26.259066 292.51813 30.647666 392.51813
40 31.885712 303.77142 44.714281 403.77142
41 26.691326 293.38265 31.728316 393.38265
42 41.974089 323.94818 69.935222 423.94818
43 25.355893 290.71179 28.389732 390.71179
44 30.771479 301.54296 41.928697 401.54296
45 29.315185 298.63037 38.287961 398.63037
46 12.917416 265.83483 2.7064606 365.83483
47 25.124563 290.24913 27.811407 390.24913
48 30.958846 301.91769 42.397115 401.91769
49 25.44857 290.89714 28.621425 390.89714
50 27.444559 294.88912 33.611397 394.88912

572.65326 5945.3065 737.04606 7945.3065

 (vii) Perform time reversal and factor reversal tests on your index n

Data taken from Basket

Goods p1*q0 p0*q0 p1*q1 p0*q1
31 6209.9354 6479.6661 8385.7562 8749.9944
32 12464.343 9201.3495 16603.738 12257.107
33 12834.647 9361.8472 17084.542 12461.805
34 53.860854 3775.7939 73.946145 5183.828
35 14670.254 10156.501 19459.537 13472.214
36 14275.029 9985.5324 18949.322 13255.25
37 36156.469 19369.876 46471.546 24895.907
38 3511.8495 5298.1723 4774.64 7203.2885
39 8964.998 7681.2531 12029.765 10307.16
40 13582.921 9685.9682 18054.349 12874.539
41 9308.5376 7830.7722 12481.369 10499.905
42 22655.388 13597.43 29648.91 17794.839
43 8253.2296 7371.2568 11092.203 9906.8461
44 12643.303 9278.9228 16836.173 12356.071
45 11433.948 8754.4044 15262.744 11685.923
46 719.4715 3433.899 990.11755 4725.6406
47 8072.2365 7292.3824 10853.377 9804.8386
48 12800.439 9347.0234 17040.151 12442.908
49 8325.8908 7402.9163 11188.033 9947.7733
50 9911.6351 8093.1017 13272.775 10837.558
SUM 226848.39 173398.07 300553 230663.39
p1*q0 p0*q0 p1*q1 p0*q1

Time Reversal Fact

Price
Laspeyres L=(p1qo/p0q0)*(poq1/p1q1) 1.004 .=1 L=(P1*q0/p0*q0)*(poq1/p0q0)

Paashe's P=(p1*q1/p0*q1)(p0*q0/p1*q0) 0.996 ≠1 P=(p1*q1/p0*q1)*(p1q1/p1q0)

Fischers F=(L*P)^1/2 0.5 ≠1 F=(L*P)^1/2

 a. Find nominal and real GDP of country Z

Nominal GDP 2019 Nominal GDP 2020

Po*Qo P1*Q1

6072.3122
1687.1155
5964.2255
16265.116
23433.64
11728.267
23647.833
241.64953
22073.507
6219.6172
22711.701
44920.24
18693.062
16107.041
11964.688
13228.585
3756.2365
2355.4222
21110.042
8608.4013
15391.957
7867.5023
15527
7173.806
4378.6033
24999
31374.486
11861.726
25151.88
7098.187
8385.7562
16603.738
17084.542
73.946145
19459.537
18949.322
 46471.546
4774.64
12029.765
18054.349
12481.369
29648.91
11092.203
16836.173
15262.744
990.11755
10853.377
17040.151
11188.033
13272.775
Nominal GDP 732165.84

Here the increase in GDP from year 2019 to 2020 is due to increase in price or quantity.

should has her own basket) e. Use your baske

(i) Laspeyre's

P1*Qo Po*Qo
6209.9354 6479.6661
12464.343 9201.3495
12834.647 9361.8472
53.860854 3775.7939
14670.254 10156.501
14275.029 9985.5324
36156.469 19369.876
3511.8495 5298.1723
8964.998 7681.2531
13582.921 9685.9682
9308.5376 7830.7722
22655.388 13597.43
8253.2296 7371.2568
12643.303 9278.9228
11433.948 8754.4044
719.4715 3433.899
8072.2365 7292.3824
12800.439 9347.0234
8325.8908 7402.9163
9911.6351 8093.1017
226848.39 173398.07

Answer 1.3082521

(i) Laspeyre's qu

Po*Q0 Po*Q1

6479.6661 8749.9944
9201.3495 12257.107
9361.8472 12461.805
3775.7939 5183.828
10156.501 13472.214
9985.5324 13255.25
19369.876 24895.907
5298.1723 7203.2885
7681.2531 10307.16
9685.9682 12874.539
7830.7722 10499.905
13597.43 17794.839
7371.2568 9906.8461
9278.9228 12356.071
8754.4044 11685.923
3433.899 4725.6406
7292.3824 9804.8386
9347.0234 12442.908
7402.9163 9947.7733
8093.1017 10837.558
173398.07 230663.39

Answer 0.7517364
al tests on your index numbers.

Factor Reversal
Price Index * Quantity Index
p0*q0)*(poq1/p0q0) 1.74 ≠ 1 p1q1/poqo 1.73

p0*q1)*(p1q1/p1q0) 1.73 .=1 p1q1/p0q0 1.73

1.50 ≠ 1 p1q1/p0q0 1.73

 Taking 201

Real GDP 2019

Po*Qo

1816.6916
3210.5317
5686.3043
9088.3922
11492.739
7581.5041
11564.979
3674.279
11034.529
5769.7737
11249.416
18833.54
9899.7135
9035.6836
7659.7179
8078.4438
4966.7769
2996.8074
10710.5
6552.8231
8797.4252
6309.5134
8842.3978
6082.0611
5169.2007
12021.178
14184.717
7625.6511
12072.851
6057.2879
6479.6661
9201.3495
9361.8472
3775.7939
10156.501
9985.5324
 19369.876
5298.1723
7681.2531
9685.9682
7830.7722
13597.43
7371.2568
9278.9228
8754.4044
3433.899
7292.3824
9347.0234
7402.9163
8093.1017
421463.5

Here to eleminate the price factor we had fixed the pric

base year price to get real GDP. The real and

e. Use your basket and calculate

(i) Laspeyre's price index (ii) Paasche's pric

P1Q1
8385.7562
16603.738
17084.542
73.946145
19459.537
18949.322
46471.546
4774.64
12029.765
18054.349
12481.369
29648.91
11092.203
 16836.173
15262.744
990.11755
10853.377
17040.151
11188.033
13272.775
300553

Answer 1.3029939

(i) Laspeyre's quantity index (ii) Paasche's quanti

P1*Q1

8385.7562
16603.738
17084.542
73.946145
19459.537
18949.322
46471.546
4774.64
12029.765
18054.349
12481.369
29648.91
11092.203
16836.173
15262.744
990.11755
10853.377
17040.151
11188.033
13272.775
300553

Answer 1.3249069
 (viii) based on your price and quantity find inflation rate and growth rate of output

Lets assume that Index in base year = 100

Inflation Rate using Laspeyres Index 30.83%
Paashe's 30.30%
Fischer's Index -14.77%
 Taking 2019 prices as a base year.

Real GDP 2019 Real GDP 2020

Po*Qo Po*Q1

2531.1132
4425.2846
7713.2291
12112.912
15160.401
10178.452
15251.304
5047.9751
14582.965
7822.6532
14853.95
24242.646
13146.257
12045.59
10279.381
10818.708
6766.3848
4137.1181
14173.718
8845.2362
11740.977
8528.2461
11798.512
8231.3129
7033.4237
15824.539
18525.103
10235.428
15889.38
8198.9364
8749.9944
12257.107
12461.805
5183.828
13472.214
13255.25
 24895.907
7203.2885
10307.16
12874.539
10499.905
17794.839
9906.8461
12356.071
11685.923
4725.6406
9804.8386
12442.908
9947.7733
10837.558
Real GDP 560804.53

price factor we had fixed the price as per 2019 and multiply the quantity of goods with
ce to get real GDP. The real and nominal GDP for base year will be the same.

(ii) Paasche's price index (iii) Fisher Price Index

Po*Q1 (L*P)1/2
8749.99441087
12257.1072484 L 1.3082521
12461.8051909 P 1.3029939
5183.8280105
13472.2142473 Answer 0.8523222
13255.2498884
24895.9067926
7203.28851037
10307.1597091
12874.539437
10499.9048249
17794.8385143
9906.84609799
12356.0706445
11685.9228583
4725.64061978
9804.83862047
12442.9080046
9947.77331367
10837.5575312
230663.394475

(ii) Paasche's quantity index (iii) Fisher Quanityt Index

P1*Qo (L*P)1/2

6209.93541302 L 0.7517364
12464.3434504 P 1.3249069
12834.6473285
53.8608536427 Answer 0.4979904
14670.2543517
14275.0288008
36156.4691105
3511.84952568
8964.99802719
13582.9206858
9308.53758633
22655.3878313
8253.22958767
12643.3033694
11433.9480751
719.471495013
8072.23648664
12800.4392409
8325.89082364
9911.63506618
226848.387109
and growth rate of output (ix) Calculate inflatio

Calculating growth rate by ta

Growth Rate L -24.826% interpretations without a
P 13149.07%
F -50.20%

0.0257414

0.026728
 b. Suppose that population in 2019 is 200 Million and in 2020 it is 250 Million. Find Real GDP per capita.

Real GDP 2019 Real GDP 2020

421463.495892748 560804.532900509

Population in 2019 Population in 2020

200,000,000.00 250,000,000.00

GDP Per capita 2019 GDP Per capita 2020

0.0021073175 0.0022432181
r Price Index
Quanityt Index
 (ix) Calculate inflation rate and growth rate of output without using index numbers. Which method is better? Expalin your ans
Inflation (p1-p0)/p0*100 2870.72%
growth rate (p0q1-p0q0)/p0q0 33.03% Index allows measure of growth in relative term so it can be consd

Calculating growth rate by taking previous year quantity as a base year can give inaccurate measure of growth and the data can not be ha
interpretations without any contect. Indexs allow measure of growth in relative term to a base value of 100, which allows an easy and
interpreation of the results.

(x) find( Σ(p1/p0))/50 and give economic interpretation of your result

Answer Average price of basket of in 2020 relative to the price in 2019

(xi) find (Σ(q1/q0))/50 and give economic interpretation of your result

Answer Average quantity of basket of in 2020 relative to the year 2019

ion. Find Real GDP per capita. c. Find nominal and real GDP of country Z assuming 2020 is a

Nominal GDP 2019 Nominal GDP 20

Taking base for nominal is orginally wrong, we don’t take base ye

calculate Nominal GDP.
4358.3663 6072.3122
1223.9977 1687.1155
4396.9135 5964.2255
12203.816 16265.116
17764.484 23433.64
8735.8964 11728.267
17932.02 23647.833
175.88989 241.64953
16702.416 22073.507
4587.4185 6219.6172
17200.366 22711.701
34897.475 44920.24
14076.703 18693.062
12082.274 16107.041
8915.5307 11964.688
9877.9244 13228.585
2757.2166 3756.2365
1706.199 2355.4222
15952 21110.042
6377.3685 8608.4013
11533.077 15391.957
5820.6706 7867.5023
11636.714 15527
5300.6764 7173.806
3218.0457 4378.6033
18990.593 24999
24023.521 31374.486
8837.2841 11861.726
19110.556 25151.88
5244.0659 7098.187
6209.9354 8385.7562
12464.343 16603.738
12834.647 17084.542
53.860854 73.946145
14670.254 19459.537
14275.029 18949.322
36156.469 46471.546
3511.8495 4774.64
8964.998 12029.765
13582.921 18054.349
9308.5376 12481.369
22655.388 29648.91
8253.2296 11092.203
12643.303 16836.173
11433.948 15262.744
719.4715 990.11755
8072.2365 10853.377
12800.439 17040.151
8325.8908 11188.033
9911.6351 13272.775
552487.86 732165.84

Nominal GDP with 2020 base year

GD

Nominal GDP / Real GDP

2019 1 GDP Delater

2020 1 GDP Delater
ethod is better? Expalin your answer

n relative term so it can be consdiered better

rowth and the data can not be have different

of 100, which allows an easy and effective

result

result
try Z assuming 2020 is a base year and also find GDP deflator

Nominal GDP 2020 Real GDP 2019 Real GDP 2020

ng, we don’t take base year to Base year 2020

l GDP.
4358.3663 6072.3122
1223.9977 1687.1155
4396.9135 5964.2255
12203.816 16265.116
17764.484 23433.64
8735.8964 11728.267
17932.02 23647.833
175.88989 241.64953
16702.416 22073.507
4587.4185 6219.6172
17200.366 22711.701
34897.475 44920.24
14076.703 18693.062
12082.274 16107.041
8915.5307 11964.688
9877.9244 13228.585
2757.2166 3756.2365
1706.199 2355.4222
15952 21110.042
6377.3685 8608.4013
11533.077 15391.957
5820.6706 7867.5023
11636.714 15527
5300.6764 7173.806
3218.0457 4378.6033
18990.593 24999
24023.521 31374.486
8837.2841 11861.726
19110.556 25151.88
5244.0659 7098.187
6209.9354 8385.7562
12464.343 16603.738
12834.647 17084.542
53.860854 73.946145
14670.254 19459.537
14275.029 18949.322
 36156.469 46471.546
3511.8495 4774.64
8964.998 12029.765
13582.921 18054.349
9308.5376 12481.369
22655.388 29648.91
8253.2296 11092.203
12643.303 16836.173
11433.948 15262.744
719.4715 990.11755
8072.2365 10853.377
12800.439 17040.151
8325.8908 11188.033
9911.6351 13272.775
552487.86 732165.84

Real GDP with 2020 base year

GDP Deflator

GDP Delater
GDP Delater
 1970 1965
Po Qo P1 Q1
A 4 10 4 5
B 20 40 3 40
P1Qo PoQo P1Q1 PoQ1
40 40 20 20
120 800 120 800

100
100

100