3. An economy only produces chips and cookies. The following table lists prices and productionfor the years 2020 and 2021:20202021PricesChips107Cookies56QuantitiesChips79Cookies1112a. What was nominal GDP for the years 2020 and 2021?b. What is the real GDP for the years 2020 and 2021? Assume 2020 is the base year.c. What is the GDP Deflator for the years 2020 and 2021?d. What is the inflation rate in 2021?

Answered: 3. An economy only produces chips and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. An economy only produces chips and cookies. The following table lists prices and production
for the years 2020 and 2021:
2020
2021
Prices
Chips
10
7
Cookies
5
6
Quantities
Chips
7
9
Cookies
11
12
a. What was nominal GDP for the years 2020 and 2021?
b. What is the real GDP for the years 2020 and 2021? Assume 2020 is the base year.
c. What is the GDP Deflator for the years 2020 and 2021?
d. What is the inflation rate in 2021?

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