Data for Saudi Arabia for the year 2022
Answer the following questions from the given Table below which contains data for Saudi Arabia for the year 2022. (5 Marks)
Production and Price Statistics for 2022
Product
Mineral Fuels (petrol) Plastics
Aluminum
Honey
Wheat
Bicycle
Tires of bicycle Furniture Wood
Quantity
400 barrels 7000 mils 499 ft3 860 kg 677 kg 350 pcs 440 pcs 560 pcs 1095 pcs
Price per unit in 2022 (In Riyals)
80 2.50 30 90 2.50 190 3.50 2500 25
Market value in 2022
Price per unit in 2020 (In Riyals)
50 3.15 25 65 1.00 125 2.10 2000 13.70
a. Complete the fourth column (market value) of the above table.
b. Identify final and intermediate goods.
c. Calculate Saudi Arabia’s nominal GDP in 2022.
d. Calculate Saudi Arabia’s real GDP in 2022.
Sample Solution
a. The fourth column (market value) of the above table is given below:
Product Mineral Fuels (petrol) Plastics Aluminum Honey Wheat Bicycle Tires of bicycle Furniture Wood
Quantity 400 barrels 7000 mils 499 ft3 860 kg 677 kg 350 pcs 440 pcs 560 pcs 1095 pcs
Price per unit in 2022 (In Riyals) 80 2.50 30 90 2.50 190 3.50 2500 25
Market value in 2022 32,000 17,500 14,970 77,000 1,692 65,500 1540 8750 27375
b. Final goods are those products which are consumed by the end user or consumer ,such as Mineral Fuels ,Plastics and Aluminum whereas Intermediate goods are used to produce other finished products , like tires for bicycles or Wood for furniture etc .
c. To calculate Saudi Arabia’s nominal GDP in 2022 then we can use the following formula : Nominal GDP = sum of market value of all final goods + intermediate good
Nominal GDP = 32000 + 17500 + 14970 + 77000 + 16920 + 65500+1540+8750+27375=112855
d. To calculate Saudi Arabia’s real GDP in 2022 then we will need to adjust for inflation using 2020 prices and quantities so that it can be compared with current year figures: Real GDP=sum of(quantity*pricein2020)/Sum of(quantity*pricein2022)*nominal GDP
Real GDP=(400*50+7000*3.15+499*25+860*2…)*112855/118785)=105943.
