Reference no: EM133065602

1. In a conversation, a friend said, "Australia's economy grew between 2015 and 2017 because nominal gross domestic product (GDP) increased from 945 billion in 2015 to 950 billion in 2016 and 970 billion in 2017. Upon checking, you found that Australia's GDP price deflator also increased from 99.5 in 2015, to 100 in 2016 and 101.5 in 2017. Prove, with numerical calculations, if the statement is factually accurate. (Use equation to prove numerical calculation and explainthe findings).

2. Is it possible, in any given year, for real gross domestic product to decrease even though nominal gross domestic product has increased. Explain using a numerical example. (Use equation to prove numerical calculation and explain the findings).