2. Real versus nominal GDP Consider a simple economy that produces two goods: pencils and envelopes. The following table shows the prices and quantities of the goods over a three-year period. Year 2016 2017 2018 Year 2016 2017 2018 Price (Dollars per pencil) 1 2 3 Pencils Quantity (Number of pencils) 145 From 2017 to 2018, nominal GDP 165 110 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2016, dollars) GDP Deflator Price (Dollars per envelope) 2 , and real GDP Envelopes 4 4 Quantity (Number of envelopes) 195 225 165

Q: your opinion, which economic indicator, nominal GDP, real GDP,  or inflation, do you believe…

A: Real GDP provides a clearer picture of the state of the economy than nominal GDP and inflation.

Q: On which basis the GDP of the country is decided?

A: Gross domestic product (GDP): It is the value of all finished or final goods and services produced…

Q: Explain why per capita real gross domestic product (GDP) is a better measure of a nation's standard…

A: Standard of living:- A country's or nation's standard of living is a representation of the country's…

Q: Explain why GDP per capita is a better measure of a nation’s standard of living that GDP. What other…

A: GDP or gross domestic product is the sum of the value of all end commodities produced within the…

Q: Does the GDP really measure happiness? Why or why not?

A: Gross Domestic Product is the value of all goods and services that are produced within the…

Q: Year GDP GDP deflator Population 1998 500 100 200 million 1999 800 160 210 million Vhich statement…

A: Gross domestic product(GDP) is the value of all final goods and services produced in an economy over…

Q: Explain why comparing the GDPs of various nations might not tell you which nations are better off.

A: When talking about GDP of an economy, I can be said that the value of GDP provide information about…

Q: What are shortcomings of using GDP to measure the standard of living? Group of answer choices GDP…

A: GDP measures the value of goods and services produced in an economy during a specific period of…

Q: if the GDP deflator is 125 and the nominal GDP is 130 billion then what is the real GDP

A: Nominal GDP(NGDP) is the GDP at current prices(P). It does not account for changes in the price(P)…

Q: How are nominal and real GDP calculated?

A: Nominal GDP refer to the market value of all final goods and services produced in an economy during…

Q: Why might per capita GDP be only an imperfect measure of a country’s standard of living? What does…

A: Disclaimer- “Since you have asked multiple question, we will solve the first three question for you…

Q: More than 4 million websites sell a combined $100 billion of pornography a year. Should these sales…

A: If the $100 billion of pornographic content is sold and purchased legally, and the transaction…

Q: nominal GDP is $

A: ‘Nominal GDP’ is the total amount of output produced in an economy in a year at ‘current market…

Q: If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP. True or…

A: Nominal GDP is the value of GDP calculated in current price.  Real GDP is the value of GDP…

Q: GDP does not take into account the underground economy, and offers measures of government production…

A: GDP refers to Gross Domestic Product. It is the sum of the value of all the goods and services…

Q: Applied Problems on Monetary Policy and Interest Rates 1. For each of the following questions, draw…

A: In the Keynesian macroeconomic theory, the equilibrium interest rate in the money market is…

Q: In an economy, Nominal GDP for year 2005 (base year = 1996) is $60 billion and the GDP deflator 2005…

A: Real GDP shows the monetary value of all finished goods and services within an economy at constant…

Q: If real GDP for a given year is $2400 and nominal GDP is $2400, what is the C Deflator?

A: Nominal GDP measures the market value of goods and services produced within an economy in a given…

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.