Assume a simple economy that only produces two goods for end use, beer and wine. Here is a list of production and prices in 2019 and 2020. 2019 2020 Liter Price Liter Price Wine 100 1 100 1,1 Вeer 50 1 55 1 1. How high is the growth rate in nominal and real GDP? 2. Assume that it turns out that it failed to take into account that the quality of the beer deteriorated between 2019 and 2020. It is estimated that the quality-adjusted production of beer has been constant over the two years. Show how this affects the calculation of the two growth rates.

Assume a simple economy that only produces two goods for end use, beer and wine. Here is a list of production and prices in 2019 and 2020. 2019 2020 Liter Price Liter Price Wine 100 1 100 1,1 Вeer 50 1 55 1 1. How high is the growth rate in nominal and real GDP? 2. Assume that it turns out that it failed to take into account that the quality of the beer deteriorated between 2019 and 2020. It is estimated that the quality-adjusted production of beer has been constant over the two years. Show how this affects the calculation of the two growth rates.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Assume a simple economy that only produces two goods for end use, beer and wine. Here is a
list of production and prices in 2019 and 2020.
2019
2020
Liter
Price
Liter
Price
Wine
100
1
100
1,1
Вeer
50
1
55
1
1. How high is the growth rate in nominal and real GDP?
2. Assume that it turns out that it failed to take into account that the quality of the beer
deteriorated between 2019 and 2020. It is estimated that the quality-adjusted production of beer
has been constant over the two years. Show how this affects the calculation of the two growth
rates.

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