Consider a simple economy that produces two goods: stickers and enamel pins. The following table shows the prices and quantities of the goods overa three-year period.Year201620172018Year201620172018Price(Dollars per sticker)242StickersUse the information from the preceding table to fill in the following table.Nominal GDP(Dollars)From 2017 to 2018, nominal GDPQuantity(Number of stickers)245130115The inflation rate in 2018 wasReal GDP(Base year 2016, dollars) GDP DeflatorPrice(Dollars per enamel pin), and real GDP2Enamel pins22Quantity(Number of enamel pins)180195155Why is real GDP a more accurate measure of an economy's production than nominal GDP?Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods andservices an economy consumes.Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.Real GDP is not influenced by price changes, but nominal GDP is.

Nominal GDP and real GDP are two indicators used to measure a nation's economic production. Nominal…

Consider a simple economy that produces two goods: stickers and enamel pins. The following table shows the prices and quantities of the goods a three-year period. Year 2016 2017 2018 Stickers Price Quantity (Dollars per sticker) (Number of stickers) 7 2 245 130 115 Year 2016 2017 2018 2 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2016, dollars) GDP Deflator From 2017 to 2018, nominal GDP The inflation rate in 2018 was and real GDP Enamel pins Price Quantity (Dollars per enamel pin) (Number of enamel pins) 2 180 2 195 2 155 Why is real GDP a more accurate measure of an economy's production than nominal GDP? O Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP is not influenced by price changes, but nominal GDP is.

Consider a simple economy that produces two goods: stickers and enamel pins. The following table shows the prices and quantities of the goods a three-year period. Year 2016 2017 2018 Stickers Price Quantity (Dollars per sticker) (Number of stickers) 7 2 245 130 115 Year 2016 2017 2018 2 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2016, dollars) GDP Deflator From 2017 to 2018, nominal GDP The inflation rate in 2018 was and real GDP Enamel pins Price Quantity (Dollars per enamel pin) (Number of enamel pins) 2 180 2 195 2 155 Why is real GDP a more accurate measure of an economy's production than nominal GDP? O Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP is not influenced by price changes, but nominal GDP is.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a three-year period. Pencils Oranges Price Price Quantity Quantity (Dollars per pencil) (Number of pencils) (Dollars per orange) (Number of oranges) Year 2016 125 1 200 2017 2 170 230 2018 4 150 4 170 Use the information from the preceding table to fill in the following table. Real GDP Nominal GDP (Dollars) (Base year 2016, dollars) GDP Deflator Year 2016 2017 2018 From 2017 to 2018, nominal GDP , and real GDP The inflation rate in 2018 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is.
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