5. Real versus nominal GDP Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a three-year period. Pencils Oranges Price Quantity Price Quantity (Number of pencils) (Dollars per orange) (Number of oranges) Year (Dollars per pencil) 150 110 2016 4. 215 155 2017 180 120 2018 3
5. Real versus nominal GDP Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a three-year period. Pencils Oranges Price Quantity Price Quantity (Number of pencils) (Dollars per orange) (Number of oranges) Year (Dollars per pencil) 150 110 2016 4. 215 155 2017 180 120 2018 3
Chapter1: Making Economics Decisions
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![5. Real versus nominal GDP
Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a
three-year period.
Pencils
Oranges
Price
Quantity
Price
Quantity
Year
(Dollars per pencil)
(Number of pencils)
(Dollars per orange)
(Number of oranges)
2016
1.
110
2.
150
2017
2.
155
4
215
120
4
180
2018
Use the information from the preceding table to fill in the following table.
Real GDP
Nominal GDP
GDP Deflator
(Dollars)
(Base year 2016, dollars)
Year
3.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F60eed353-4ad1-4b61-b1a0-b24e01c73db3%2F6b67243e-90f2-4965-8859-13308d17940c%2Fg2fat6r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:5. Real versus nominal GDP
Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a
three-year period.
Pencils
Oranges
Price
Quantity
Price
Quantity
Year
(Dollars per pencil)
(Number of pencils)
(Dollars per orange)
(Number of oranges)
2016
1.
110
2.
150
2017
2.
155
4
215
120
4
180
2018
Use the information from the preceding table to fill in the following table.
Real GDP
Nominal GDP
GDP Deflator
(Dollars)
(Base year 2016, dollars)
Year
3.
![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 economny's production than nominal GDP?
Real GDP does not include the value of intermediate goods and services, but nominal GDP does.
OReal 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F60eed353-4ad1-4b61-b1a0-b24e01c73db3%2F6b67243e-90f2-4965-8859-13308d17940c%2Fav1rnxm_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 economny's production than nominal GDP?
Real GDP does not include the value of intermediate goods and services, but nominal GDP does.
OReal 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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