Calculate nominal GDP in 2013 and 2014.
Calculate real GDP in 2013 and 2014 expressed
in base-year prices.
GDP Expands 11.4 Percent, Fastest in 13 Years
China’s gross domestic product grew 11.4 percent
last year and marked a fifth year of double-digit
growth. The increase was especially remarkable given that the United States is experiencing a slowdown due to the sub-prime crisis and
housing slump. Citigroup estimates that each 1
percent drop in the U.S. economy will shave 1.3
percent off China’s growth, because Americans
are heavy users of Chinese products. In spite of
the uncertainties, China is expected to post its
sixth year of double-digit growth next year.
Source: The China Daily , January 24, 2008
Use the expenditure approach for calculating
China’s GDP to explain why “each 1 percent
drop in the U.S. economy will shave 1.3 percent
off China’s growth.”