Question: Only two goods, bread and cake are produced in an economy and the base year is 2004. Use the following data to calculate nominal

Only two goods, bread and cake are produced in an economy and

Only two goods, bread and cake are produced in an economy and the base year is 2004. Use the following data to calculate nominal GDP and real GDP in 2004 and 2005: 2004 Item Quantity of bread (billions) Price of bread Quantity of cake (billions) Price of cake 5,000 $2.50 1,200 $4.00 2005 6,000 $2.25 1,150 $3.80

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