Assume an economy consumes only two goods: food and clothing. The prices and quantities produced domestically of each good for two different years are shown in the table below. Year 1 quantity Year 2 quantity Year 1 price Year 2 price Food 5000 5500 $2 $5 Clothing 1000 1200 $30 $25 What is the nominal GDP for year 2? What is the real GDP for year 2, using year 1 as the base year? What is the GDP deflator? (2 decimal places)

Assume an economy consumes only two goods: food and clothing. The prices and quantities produced domestically of each good for two different years are shown in the table below. Year 1 quantity Year 2 quantity Year 1 price Year 2 price Food 5000 5500 $2 $5 Clothing 1000 1200 $30 $25 What is the nominal GDP for year 2? What is the real GDP for year 2, using year 1 as the base year? What is the GDP deflator? (2 decimal places)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(i) GDP Deflator for Year 1 (ii) GDP Deflator for Year 2
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