Attempts2. Real versus nominal GDPConsider a simple economy that produces two goods: plastic cups and seltzers. The following table shows the prices and quantities of the goods over athree-year period.Year201920202021Keep the Highest / 4PriceQuantityPriceQuantityYear (Dollars per plastic cup) (Number of plastic cups) (Dollars per seltzer) (Number of seltzers)2019221531552020413521020212150190Use the information from the preceding table to fill in the following table.Nominal GDP(Dollars)Plastic cupsFrom 2020 to 2021, nominal GDPReal GDP(Base year 2019, dollars) GDP DeflatorThe inflation rate in 2021 was, and real GDP33SeltzersWhy is real GDP a more accurate measure of an economy's production than nominal GDP?Real GDP is not influenced by price changes, but nominal GDP is.Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

Nominal GDP refers to the market value of all the final goods and services produced in an economy…

2. Real versus nominal GDP Consider a simple economy that produces two goods: plastic cups and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Year 2019 2020 2021 Year 2019 2020 2021 Use the information from the preceding table to fill in the following table. Price Quantity Price Quantity (Dollars per plastic cup) (Number of plastic cups) (Dollars per seltzer) (Number of seltzers) 2 215 3 155 4 135 210 2 150 190 Nominal GDP (Dollars) Plastic cups Real GDP (Base year 2019, dollars) GDP Deflator From 2020 to 2021, nominal GDP The inflation rate in 2021 was , and real GDP 3 W W Seltzers 3 Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

2. Real versus nominal GDP Consider a simple economy that produces two goods: plastic cups and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Year 2019 2020 2021 Year 2019 2020 2021 Use the information from the preceding table to fill in the following table. Price Quantity Price Quantity (Dollars per plastic cup) (Number of plastic cups) (Dollars per seltzer) (Number of seltzers) 2 215 3 155 4 135 210 2 150 190 Nominal GDP (Dollars) Plastic cups Real GDP (Base year 2019, dollars) GDP Deflator From 2020 to 2021, nominal GDP The inflation rate in 2021 was , and real GDP 3 W W Seltzers 3 Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Attempts
2. Real versus nominal GDP
Consider a simple economy that produces two goods: plastic cups and seltzers. The following table shows the prices and quantities of the goods over a
three-year period.
Year
2019
2020
2021
Keep the Highest / 4
Price
Quantity
Price
Quantity
Year (Dollars per plastic cup) (Number of plastic cups) (Dollars per seltzer) (Number of seltzers)
2019
2
215
3
155
2020
4
135
210
2021
2
150
190
Use the information from the preceding table to fill in the following table.
Nominal GDP
(Dollars)
Plastic cups
From 2020 to 2021, nominal GDP
Real GDP
(Base year 2019, dollars) GDP Deflator
The inflation rate in 2021 was
, and real GDP
3
3
Seltzers
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
Real GDP is not influenced by price changes, but nominal GDP is.
Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

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The table contains price and quantity information for two vehicle models produced by Ford Motor Company, the F-series trucks and Escape SUVs. 2016 2016 2017 2017 price quantity price quantity ford escapes $24,485 307,069 $24,645 308,296 ford trucks $44,400 820,799 $24,645 896,764 a. Calculate the amount contributed by Ford to U.S. GDP (real and nominal) from the sales of the two models in 2016 and 2017. b. Determine the growth rate of nominal GDP (if Ford were the entire economy). c. Determine the growth rate of real GDP (if Ford were the entire economy).
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