5. Real versus nominal GDPConsider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over athree-year period.Year201820192020Year201820192020PriceQuantity(Dollars per beer) (Number of beers)321015012523BeersUse the information from the preceding table to fill in the following table.From 2019 to 2020, nominal GDPThe inflation rate in 2020 wasNominal GDPReal GDP(Dollars) (Base year 2018, dollars) GDP DeflatordecreasedPrice(Dollars per seltzer)4144and real GDPSeltzersQuantity(Number of seltzers)180200180increasedWhy is real GDP a more accurate measure or an economy's production than nominal GDP?Real GDP is not influenced by price changes, but nominal GDP is.Real GDP includes the value of exports, but nominal GDP does not.Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Chapter 10 Homework5. Real versus nominal GDPConsider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over athree-year period.Year201820192020Year201820192020Price(Dollars per beer)323Nominal GDP(Dollars)BeersUse the formation from the preceding table fill in the following table.From 2019 to 2020, nominalQuantity(Number of beers)210The inflation rate in 2020 wasReal GDP(E-13.6% 2018, dollars) GDP Deflator0.1%13.6%15012588%113.6%Price(Dollars per seltzer)444, and real GDPSeltzersO Real GDP is not influenced by price changes, but nominal GDP is.O Real GDP includes the value of exports, but nominal GDP does not.Quantity(Number of seltzers)180Why is real GDP a more accurate measure of an economy's production than nominal GDP?200180O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

The measure of a country’s economic output adjusted for inflation or deflation is termed real GDP.…

Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Price Quantity Year (Dollars per beer) (Number of beers) 2018 3 210 2019 2 150 2020 3 125 Beers Year 2018 2019 2020 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator From 2019 to 2020, nominal GDP The inflation rate in 2020 was 1 Price (Dollars per seltzer) 4 and real GDP Seltzers decreased increased Why is real GDP a more accurate measure or an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Real GDP includes the value of exports, but nominal GDP does not. Quantity (Number of seltzers) 180 200 180 Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Price Quantity Year (Dollars per beer) (Number of beers) 2018 3 210 2019 2 150 2020 3 125 Beers Year 2018 2019 2020 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator From 2019 to 2020, nominal GDP The inflation rate in 2020 was 1 Price (Dollars per seltzer) 4 and real GDP Seltzers decreased increased Why is real GDP a more accurate measure or an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Real GDP includes the value of exports, but nominal GDP does not. Quantity (Number of seltzers) 180 200 180 Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

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

5. Real versus nominal GDP
Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a
three-year period.
Year
2018
2019
2020
Year
2018
2019
2020
Price
Quantity
(Dollars per beer) (Number of beers)
3
210
150
125
2
3
Beers
Use the information from the preceding table to fill in the following table.
From 2019 to 2020, nominal GDP
The inflation rate in 2020 was
Nominal GDP
Real GDP
(Dollars) (Base year 2018, dollars) GDP Deflator
decreased
Price
(Dollars per seltzer)
4
1
4
4
and real GDP
Seltzers
Quantity
(Number of seltzers)
180
200
180
increased
Why is real GDP a more accurate measure or an economy's production than nominal GDP?
Real GDP is not influenced by price changes, but nominal GDP is.
Real GDP includes the value of exports, but nominal GDP does not.
Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

Chapter 10 Homework
5. Real versus nominal GDP
Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a
three-year period.
Year
2018
2019
2020
Year
2018
2019
2020
Price
(Dollars per beer)
3
2
3
Nominal GDP
(Dollars)
Beers
Use the formation from the preceding table fill in the following table.
From 2019 to 2020, nominal
Quantity
(Number of beers)
210
The inflation rate in 2020 was
Real GDP
(E-13.6% 2018, dollars) GDP Deflator
0.1%
13.6%
150
125
88%
113.6%
Price
(Dollars per seltzer)
4
4
4
, and real GDP
Seltzers
O Real GDP is not influenced by price changes, but nominal GDP is.
O Real GDP includes the value of exports, but nominal GDP does not.
Quantity
(Number of seltzers)
180
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
200
180
O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

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