1. A tiny economy only produces baseball bats and sells them in dollars. In 2020, they produced 500 bats for $100 each. In 2021, they produced 800 bats for $200 each. (a) Calculate nominal GDP for both years. Show your calculations clearly! (b) Calculate nominal GDP growth rate from 2020 to 2021. (c) Calculate real GDP growth rate from 2020 to 2021. (d) In general terms, explain what nominal GDP tells us and what real GDP tells us. You can use the hypothetical numbers here or use actual U.S. statistics in your answer, but be sure to discuss the concept behind nominal GDP vs real GDP

1. A tiny economy only produces baseball bats and sells them in dollars. In 2020, they produced 500 bats for $100 each. In 2021, they produced 800 bats for $200 each. (a) Calculate nominal GDP for both years. Show your calculations clearly! (b) Calculate nominal GDP growth rate from 2020 to 2021. (c) Calculate real GDP growth rate from 2020 to 2021. (d) In general terms, explain what nominal GDP tells us and what real GDP tells us. You can use the hypothetical numbers here or use actual U.S. statistics in your answer, but be sure to discuss the concept behind nominal GDP vs real GDP

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Solutions for question 12
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