Question: Suppose the following data describe output in two different years: (a) Compute nominal GDP in each year. (b) By what percentage did nominal GDP increase

Suppose the following data describe output in two different years:
(a) Compute nominal GDP in each year.
(b) By what percentage did nominal GDP increase between Year 1 and Year 2?
(c) Now compute real GDP in Year 2 by using the prices of Year 1.
(d) By what percentage did real GDP increase between Year 1 and Year 2?

Year 1 20,000 @ 25 each Item Year 2 30,000 @ 30 each 650 @ $900 each 12,000 @ $1.50 each Apples Bicycles 700 @ $800 each 10,000 @ $1.00 each Movie rentals

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a Year 1 575000 Year 2 612000 b Nominal GDP increased by 64 c 539500 d Real GDP decreased by 62 Expl... View full answer

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