Consider the following data on Prices and Quantities of T-Shirts and Pajamas. YearPrice of T-ShirtsQuantity of T-ShirtsPrice of PajamasQuantity of Pajamas2015$10120$12200 2016$12300$152002017$14275$18180Was the growth rate of real GDP higher or lower that the growth rate of nominal GDP? Explain.Using 2015 as the base year, calculate the CPI for each yearCalculate the inflation rate for 2015, 2016 and 2017.

Nominal GDP = Price (Current Year) * Quantity (Current Year) Real GDP = Price (Base Year) *…

Answered: Consider the following data on Prices…

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 the following data on Prices and Quantities of T-Shirts and Pajamas.

Year	Price of T-Shirts	Quantity of T-Shirts	Price of Pajamas	Quantity of Pajamas
2015	$10	120	$12	200

2016	$12	300	$15	200
2017	$14	275	$18	180

Was the growth rate of real GDP higher or lower that the growth rate of nominal GDP? Explain.
Using 2015 as the base year, calculate the CPI for each year
Calculate the inflation rate for 2015, 2016 and 2017.

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