Consider a simple economy that produces two goods: stickers and paper plates. The following table shows the prices and quantities of the goods over a three-year period. Price Quantity Year (Dollars per sticker) (Number of stickers) 2018 2 255 2019 3 165 2020 2 130 Year 2018 2019 2020 Stickers 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 and real GDP Price Quantity (Dollars per paper plate) (Number of paper plates) 2 195 190 195 Paper plates 3 3 Why is real GDP a more accurate measure of an economy's production than nominal GDP? O Real GDP includes the value of exports, but nominal GDP does not. 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.
Consider a simple economy that produces two goods: stickers and paper plates. The following table shows the prices and quantities of the goods over a three-year period. Price Quantity Year (Dollars per sticker) (Number of stickers) 2018 2 255 2019 3 165 2020 2 130 Year 2018 2019 2020 Stickers 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 and real GDP Price Quantity (Dollars per paper plate) (Number of paper plates) 2 195 190 195 Paper plates 3 3 Why is real GDP a more accurate measure of an economy's production than nominal GDP? O Real GDP includes the value of exports, but nominal GDP does not. 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.
Chapter1: Making Economics Decisions
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Transcribed Image Text:5. Real versus nominal GDP
Consider a simple economy that produces two goods: stickers and paper plates. The following table shows the prices and quantities of the goods over
a three-year period.
2018
2019
2020
Price
Quantity
Price
Quantity
Year (Dollars per sticker) (Number of stickers) (Dollars per paper plate) (Number of paper plates)
2
255
165
130
Year
2018
NWN
2019
2020
3
2
Use the information from the preceding table to fill in the following table.
Nominal GDP
Real GDP
(Dollars) (Base year 2018, dollars) GDP Deflator
Stickers
From 2019 to 2020, nominal GDP
and real GDP
Paper plates
2
3
3
The inflation rate in 2020 was
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
O Real GDP includes the value of exports, but nominal GDP does not.
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.
195
190
195
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