Use the Information in the Table Below to Calculate the Real

question 157

Essay

Use the information in the table below to calculate the real 2015 gross domestic product GDP), in 2009 dollars. Explain how the calculation is performed, and the reasoning behind it. $$\begin{array} { c } \hline { \quad\quad\quad\text { U.S. Nominal GDP and Price Level, 2006-2015 } } \\\hline \text { Year } & \begin{array} { l } \text { Nominal GDP } \\\text { (billions of dollars) }\end{array} & \begin{array} { l } \text { Price Level } \\\text { (GDP deflator) }\end{array} \\\hline 2006 & 13,855.9 & 95 \\2007 & 14,477.6 & 97 \\2008 & 14,718.6 & 99 \\2009 & 14,418.7 & 100 \\2010 & 14,964.4 & 101 \\2011 & 15,517.9 & 013 \\2012 & 16,155.3 & 105 \\2013 & 16,663.2 & 107 \\2014 & 17,348.1 & 109 \\2015 & 17,937.8 & 110 \\\hline\end{array}$$

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Definitions:

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the invention of new products and procedures.

Proration

The allocation of costs or revenues among departments, products, or periods based on a fair and equitable basis.

Underapplied Overhead

A situation where the allocated overhead costs are less than the actual overhead costs incurred, leading to a cost discrepancy.

Overapplied Overhead

Overapplied overhead occurs when the allocated overhead cost in production exceeds the actual overhead expenses incurred, leading to adjustments in accounting.