Consider a simple economy that produces two goods: cupcakes and erasers. The following table shows the prices
Fantastic news! We've Found the answer you've been seeking!
Question:
Consider a simple economy that produces two goods: cupcakes and erasers. The following table shows the prices and quantities for the goods over a three-year period.
Year | Cupcakes | Erasers | ||
---|---|---|---|---|
Price | Quantity | Price | Quantity | |
(Dollars per cupcake) | (Number of cupcakes) | (Dollars per eraser) | (Number of erasers) | |
2008 | 1 | 110 | 2 | 150 |
2009 | 2 | 155 | 4 | 215 |
2010 | 3 | 120 | 4 | 180 |
Use the information from the previous table to fill in the following table.
Year | Nominal GDP | Real GDP | GDP Deflator |
---|---|---|---|
(Dollars) | (Base year 2008, Dollars) | ||
2008 | |||
2009 | |||
2010 |
From 2009 to 2010, nominal GDPwas ____and real gdp was ______
The inflation rate in 2010 was .
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
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.
Real GDP is not influenced by price changes, but nominal GDP is.
Related Book For
Posted Date: