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) 2018 2 2019 4 2020 Year 2018 2019 2 2020 Beers Use the information from the preceding table to fill in the following table. Quantity (Number of beers) 215 135 150 From 2019 to 2020, nominal GDP The inflation rate in 2020 was Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator Price (Dollars per enamel pin) 3 3 3 Enamel pins and real GDP Why is real GDP a more accurate measure of an economy's production than nominal GDP? Quantity (Number of enamel pins) 155 210 190 O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. O 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.
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) 2018 2 2019 4 2020 Year 2018 2019 2 2020 Beers Use the information from the preceding table to fill in the following table. Quantity (Number of beers) 215 135 150 From 2019 to 2020, nominal GDP The inflation rate in 2020 was Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator Price (Dollars per enamel pin) 3 3 3 Enamel pins and real GDP Why is real GDP a more accurate measure of an economy's production than nominal GDP? Quantity (Number of enamel pins) 155 210 190 O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. O 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.
Chapter1: Making Economics Decisions
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![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.
2018
Quantity
Quantity
Year (Dollars per beer) (Number of beers) (Dollars per enamel pin) (Number of enamel pins)
MA
215
135
150
2019
2020
Year
2018
2019
Price
2020
2
4
2
Use the information from the preceding table to fill in the following table.
Beers
Nominal GDP
Real GDP
(Dollars) (Base year 2018, dollars) GDP Deflator
From 2019 to 2020, nominal GDP
The inflation rate in 2020 was
Price
1
and real GDP
3
3
Enamel pins
3
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
155
210
190
O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
O 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a554cb6-087c-4146-bb5a-9e55dcfd63ed%2Fd12ed816-c0d5-4d5f-9db1-074a026d5052%2F28ut1m6_processed.png&w=3840&q=75)
Transcribed Image Text: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.
2018
Quantity
Quantity
Year (Dollars per beer) (Number of beers) (Dollars per enamel pin) (Number of enamel pins)
MA
215
135
150
2019
2020
Year
2018
2019
Price
2020
2
4
2
Use the information from the preceding table to fill in the following table.
Beers
Nominal GDP
Real GDP
(Dollars) (Base year 2018, dollars) GDP Deflator
From 2019 to 2020, nominal GDP
The inflation rate in 2020 was
Price
1
and real GDP
3
3
Enamel pins
3
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
155
210
190
O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
O 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.
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