5. Real versus nominal GDPConsider a simple economy that produces two goods: beers and enamel pins. The following table shows the prices and quantities of the goods over athree-year period.PriceYear (Dollars per beer)201920202021242Year201920202021BeersUse the information from the preceding table to fill in the following table.Nominal GDP(Dollars)8951.170870Quantity(Number of beers)215135150Real GDP(Base year 2019, dollars)From 2020 to 2021, nominal GDPThe inflation rate in 2021 wasPriceQuantity(Dollars per enamel pin) (Number of enamel pins)333GDP Deflatorand real GDPEnamel pins155210190 Why is real GDP a more accurate measure of an economy's production than nominal GDP?Real GDP includes the value of exports, but nominal GDP does not.Real GDP is not influenced by price changes, but nominal GDP is.Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

5. Real versus nominal GDP Consider a simple economy that produces two goods: beers and enamel pins. The following table shows the prices and quantities of the goods over a three-year period. Price Year (Dollars per beer) 2019 2020 2021 2 4 Year 2019 2020 2021 2 Beers 870 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2019, dollars) 895 1,170 From 2020 to 2021, nominal GDP The inflation rate in 2021 was Quantity (Number of beers) 215 135 150 Price Quantity (Dollars per enamel pin) (Number of enamel pins) 155 210 190 3 3 GDP Deflator and real GDP Enamel pins

5. Real versus nominal GDP Consider a simple economy that produces two goods: beers and enamel pins. The following table shows the prices and quantities of the goods over a three-year period. Price Year (Dollars per beer) 2019 2020 2021 2 4 Year 2019 2020 2021 2 Beers 870 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2019, dollars) 895 1,170 From 2020 to 2021, nominal GDP The inflation rate in 2021 was Quantity (Number of beers) 215 135 150 Price Quantity (Dollars per enamel pin) (Number of enamel pins) 155 210 190 3 3 GDP Deflator and real GDP Enamel pins

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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