Answer:
Part 1
Suppose that nominal GDP was $11 trillion in 2040 in Mordor. In 2050, nominal GDP was $15 trillion in Mordor. The price level fell 3% between 2040 and 2050, and population growth was 2%. Between 2040 and 2050 in Mordor,
nominal GDP growth was 36.4%
and economic growth was 37.4%.
total nominal growth rate:
(15 - 11) / 11 = 0.3636 = 36.4%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 36.36% - (-3%) - 2% = 37.36%
Part 2
Suppose that nominal GDP was $20 trillion in 2040 in Mordor. In 2050, nominal GDP was $18 trillion in Mordor. The price level rose 3% between 2040 and 2050, and population growth was 2%.
Between 2040 and 2050 in Mordor, nominal GDP growth was -10%
and economic growth was -15%
total nominal growth rate:
(18 - 20) / 20 = -0.1 = -10%
economic growth = nominal GDP growth rate - change in price level - population growth rate = -10% - 3% - 2% = -15%
Part 3
Suppose that nominal GDP was $8 trillion in 2040 in Mordor. In 2050, nominal GDP was $10 trillion in Mordor. The price level rose 18.0% between 2040 and 2050, and population growth was 13.0%.
Between 2040 and 2050 in Mordor, nominal GDP growth was 25%
and economic growth was -6%.
total nominal growth rate:
(10 - 8) / 8 = 0.25 = 25%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 25% - 18% - 13% = -6%
