Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Price Quantity Year (Dollars per beer) (Number of beers) 2018 3 210 2019 2 150 2020 3 125 Beers Year 2018 2019 2020 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator From 2019 to 2020, nominal GDP The inflation rate in 2020 was 1 Price (Dollars per seltzer) 4 and real GDP Seltzers decreased increased Why is real GDP a more accurate measure or an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Real GDP includes the value of exports, but nominal GDP does not. Quantity (Number of seltzers) 180 200 180 Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Price Quantity Year (Dollars per beer) (Number of beers) 2018 3 210 2019 2 150 2020 3 125 Beers Year 2018 2019 2020 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator From 2019 to 2020, nominal GDP The inflation rate in 2020 was 1 Price (Dollars per seltzer) 4 and real GDP Seltzers decreased increased Why is real GDP a more accurate measure or an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Real GDP includes the value of exports, but nominal GDP does not. Quantity (Number of seltzers) 180 200 180 Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Economic Fluctuations, Unemployment, And Inflation
Section: Chapter Questions
Problem 14CQ
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