Consider a simple economy that produces two goods: pens and muffins. The following table shows the prices and quantities of the gonds over a three- year period. Pens Muffins Price Quantity Price Quantity (Dollars per pen) (Number of pens) (Dollars per muffin) (Number of nmuffins) Year 2018 125 155 2019 135 3. 210 2020 2. 125 165 Use the information from the preceding table to fil in the following table. Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator Year 2018 2019 2020 From 2019 to 2020, nominal GDP and real GDP The inflation rate in 2020 was Why is real GOP a more accurate measure of an economy's production than nominal GDP? O Real GDP does not include the value of intermediate goods and services, but nominal GDP does. O Real GDP is not influenced by price changes, but nominal GDP is. O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Consider a simple economy that produces two goods: pens and mumins. The following table shows the prices and quantities of the gonds over a three-
year period.
Pens
Muffins
Price
Quantity
Price
Quantity
Year
(Dollars per pen) (Number of pens) (Dollars per muffin)
(Number of nmuffins)
2018
125
155
2019
135
3.
210
2020
125
165
Use the information from the preceding table to fill in the following table.
Nominal GDP
Real GDP
Year
(Dollars)
(Base year 2018, dollars) GDP Deflator
2018
2019
2020
From 2019 to 2020, nominal GDP
and real GDP
The inflation rate in 2020 was
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
Real GDP does not include the value of intermediate goods and services, but nominal GDP does.
O Real GDP is not influenced by price changes, but nominal GDP is.
O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
Transcribed Image Text:Consider a simple economy that produces two goods: pens and mumins. The following table shows the prices and quantities of the gonds over a three- year period. Pens Muffins Price Quantity Price Quantity Year (Dollars per pen) (Number of pens) (Dollars per muffin) (Number of nmuffins) 2018 125 155 2019 135 3. 210 2020 125 165 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP Year (Dollars) (Base year 2018, dollars) GDP Deflator 2018 2019 2020 From 2019 to 2020, nominal GDP and real GDP The inflation rate in 2020 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP does not include the value of intermediate goods and services, but nominal GDP does. O Real GDP is not influenced by price changes, but nominal GDP is. O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
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