2 Real versus nominal GDP Consider a simple economy that produces two goods coffees and seltzers The following table shows the prices and quantities of the goods over a three year period Year Coffees Seltzers Price Quantity Price Quantity (Dollars per coffee) (Number of coffees) (Dollars per seltzer) (Number of seltzers) 2016 2 245 2 180 2017 4 130 2 195 2018 2 115 2 155 Use the information from the preceding table to fill in the following table Year Nominal GDP Real GDP GDP Deflator (Dollars) (Base year 2016, dollars) 2016 2017 2018 From 2017 to 2018, nominal GDP , and real GDP The inflation rate in 2018 was Why is real GDP a more accurate measure of an economy's production than nominal GDP Real GDP is not influenced by price changes, but nominal GDP is Real GDP does not include the value of intermediate goods and services, but nominal GDP does Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes

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Question: 2 . Real versus nominal GDP Consider a simple economy that produces two goods: coffees and seltzers. The following table shows the prices and quantities

2 . Real versus nominal GDP

Consider a simple economy that produces two goods: coffees and seltzers. The following table shows the prices and quantities of the goods over a three-year period.

Year	Coffees	Seltzers
Price	Quantity	Price	Quantity
(Dollars per coffee)	(Number of coffees)	(Dollars per seltzer)	(Number of seltzers)
2016	2	245	2	180
2017	4	130	2	195
2018	2	115	2	155

Use the information from the preceding table to fill in the following table.

Year	Nominal GDP	Real GDP	GDP Deflator
(Dollars)	(Base year 2016, dollars)
2016
2017
2018

From 2017 to 2018, nominal GDP , and real GDP .

The inflation rate in 2018 was .

Why is real GDP a more accurate measure of an economy's production than nominal GDP?

Real GDP is not influenced by price changes, but nominal GDP is.

Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.

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