The economy of Fantasia produces only 2 goods namely Shoes and Computers. The total production and average prices of shoes and computers are displayed in Table 2 attached. (a)Explain why nominal GDP in 2020 differs from real GDP in 2020  (b) Calculate the changes in prices for both products. How much has price changed from 2019 to 2020?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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The economy of Fantasia produces only 2 goods namely Shoes and Computers. The total production
and average prices of shoes and computers are displayed in Table 2 attached.

(a)Explain why nominal GDP in 2020 differs from real GDP in 2020 
(b) Calculate the changes in prices for both products. How much has price changed from 2019 to
2020?

Products Average
Price in
2019
Shoes 110
Computers 99
Average
Price in
2020
121
148
Total
production
in 2019
(units)
3500
2000
Total
production
in 2020
(units)
3700
3000
Transcribed Image Text:Products Average Price in 2019 Shoes 110 Computers 99 Average Price in 2020 121 148 Total production in 2019 (units) 3500 2000 Total production in 2020 (units) 3700 3000
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