5. Consider a simple economy that produces two goods: apples and oranges. The following table shows the prices and quantities of the goods over a three-year period. Apples Oranges Price Quantity Price Quantity Year (Dollars per apple) (Number of apples) (Dollars per orange) (Number of oranges) 2016 145 2 195 2017 2 165 225 2018 110 165 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP Year (Dollars) (Base year 2016, dollars) GDP Deflator 2016 2017 2018 From 2017 to 2018, nominal GDP and real GDP The inflation rate in 2018 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. 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. 3.

5. Consider a simple economy that produces two goods: apples and oranges. The following table shows the prices and quantities of the goods over a three-year period. Apples Oranges Price Quantity Price Quantity Year (Dollars per apple) (Number of apples) (Dollars per orange) (Number of oranges) 2016 145 2 195 2017 2 165 225 2018 110 165 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP Year (Dollars) (Base year 2016, dollars) GDP Deflator 2016 2017 2018 From 2017 to 2018, nominal GDP and real GDP The inflation rate in 2018 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. 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. 3.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

5. Real versus nominal GDP
Consider a simple economy that produces two goods: apples and oranges. The following table shows the prices and quantities of the goods over a
three-year period.
Apples
Oranges
Price
Quantity
Price
Quantity
Year
(Dollars per apple) (Number of apples) (Dollars per orange) (Number of oranges)
2016
145
2
195
2017
2
165
4
225
2018
3
110
165
Use the information from the preceding table to fill in the following table.
Nominal GDP
Real GDP
Year
(Dollars)
(Base year 2016, dollars)
GDP Deflator
2016
2017
2018
From 2017 to 2018, nominal GDP
and real GDP
The inflation rate in 2018 was
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and
services an economy consumes.
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.

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