Between 1929 and 1933, NNP Measured in Current Prices Fell

question 151

Essay

Between 1929 and 1933, NNP measured in current prices fell from $96 billion to $48 billion. Over the same period, the relevant price index fell from 100 to 75.
a.What was the percentage decline in nominal NNP from 1929 to1933?
b.What was the percentage decline in real NNP from 1929 to 1933? Show your work.

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Definitions:

Index

A statistical measure representing the change in a specified set of data points, often used in finance to track the performance of a group of stocks or bonds.

Wilshire 5000

An index that measures the performance of all U.S. headquartered equity securities with readily available price data.

Russell 2000

An index measuring the performance of approximately 2000 smallest-cap American companies in the Russell 3000 Index.

DJIA

An abbreviation for the Dow Jones Industrial Average, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.