12uAssume an economy that is producing only one product (pizza) and that year 3 is the base year. |Output and price data for a five-year period are as follows. Fill the blanks on the basis of these data. (2) (1) (3) (4) (5) Price of Pizza per unit $10 Nominal GDP Units of Price Index (Year 3= 100) Real GDP Output Year 1 $50 2 7 20 140 _100 25 30 3 4 10 11 28
12uAssume an economy that is producing only one product (pizza) and that year 3 is the base year. |Output and price data for a five-year period are as follows. Fill the blanks on the basis of these data. (2) (1) (3) (4) (5) Price of Pizza per unit $10 Nominal GDP Units of Price Index (Year 3= 100) Real GDP Output Year 1 $50 2 7 20 140 _100 25 30 3 4 10 11 28
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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12. Assume an economy that is producing only one product (pizza) and that year 3 is the base year. Output and price data for a five-year period are as follows. Fill the blanks on the basis of these data.
| Year | Units of Output | Price of Pizza per unit | Price Index (Year 3 = 100) | Nominal GDP | Real GDP |
|------|-----------------|-------------------------|----------------------------|-------------|----------|
| 1 | 5 | $10 | | $50 | |
| 2 | 7 | 20 | | 140 | |
| 3 | 8 | 25 | 100 | | |
| 4 | 10 | 30 | | | |
| 5 | 11 | 28 | | | |
**Explanation of the Table:**
The table offers data about an economy producing only one product, pizzas, over a five-year period. The data is organized into five columns:
1. **Year**: Indicates the specific year within the period.
2. **Units of Output**: The quantity of pizzas produced.
3. **Price of Pizza per unit**: The cost of each pizza in dollars.
4. **Price Index (Year 3 = 100)**: A price index that uses year 3 as a base (index value of 100) to compare the price levels across different years.
5. **Nominal GDP**: The gross domestic product calculated using current prices during each year.
6. **Real GDP**: The GDP adjusted for inflation, with Year 3 as the base year for comparison.
The task involves filling in the blanks for the Price Index, Nominal GDP for years 3 to 5, and Real GDP for all years, based on the provided information.
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