6. Real versus nominal values and correcting for inflationConsider the following hypothetical economy with the following economic data.YearNominal GDPGDP Deflator(Dollars)(Dollars)2008$3251002009$1,2603152010$1,280400 Use the information from the previous table to fill in the following table.Hint: You will need to convert all the nominal values above into real 2008 dollars using the GDP deflator. Round your results to the nearest whole dollar when entering your answers.YearReal GDP(Dollars)(Base year 2008)2008 2009 2010 From 2009 to 2010, nominal GDP , and real GDP . The inflation rate in 2010 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. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP is not influenced by price changes, but nominal GDP is. 6. Real versus nominal values and correcting for inflationConsider the following hypothetical economy with the following economic data.ITTNominal GDP GDP DeflatorYear(Dollars)(Dollars)2008$3251002009$1.2603152010$1,280400Use the information from the previous table to fill in the following table.Hint: You will need to convert all the nominal values above into real 2008 dollars using the GDP deflator. Round your results to the nearest wholedollar vhen entering your answers.Real GDP(Dollars)Year (Base year 2008)200820092010From 2009 to 2010, nominal GDP, and real GDPThe inflation rate in 2010 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 thevalue of the goods and services an economy consumes.Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.Real GDP is not influenced by price changes, but nominal GDP is.

It is given that Year Nominal GDP GDP Deflator (Dollars) (Dollars) 2008…

Answered: 6. Real versus nominal values 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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6. Real versus nominal values and correcting for inflation

Consider the following hypothetical economy with the following economic data.

Year	Nominal GDP	GDP Deflator
(Dollars)	(Dollars)
2008	$325	100
2009	$1,260	315
2010	$1,280	400

Use the information from the previous table to fill in the following table.

Hint: You will need to convert all the nominal values above into real 2008 dollars using the GDP deflator. Round your results to the nearest whole dollar when entering your answers.

Year	Real GDP
(Dollars)
(Base year 2008)
2008
2009
2010

From 2009 to 2010, nominal GDP , and real GDP .

The inflation rate in 2010 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.

Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

Real GDP is not influenced by price changes, but nominal GDP is.

6. Real versus nominal values and correcting for inflation
Consider the following hypothetical economy with the following economic data.
ITT
Nominal GDP GDP Deflator
Year
(Dollars)
(Dollars)
2008
$325
100
2009
$1.260
315
2010
$1,280
400
Use the information from the previous table to fill in the following table.
Hint: You will need to convert all the nominal values above into real 2008 dollars using the GDP deflator. Round your results to the nearest whole
dollar vhen entering your answers.
Real GDP
(Dollars)
Year (Base year 2008)
2008
2009
2010
From 2009 to 2010, nominal GDP
, and real GDP
The inflation rate in 2010 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.
Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
Real GDP is not influenced by price changes, but nominal GDP is.

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