Suppose a simple economy produces only two goods, pillows and rugs. In the first year, 50 pillows are produced, and sold at $5 each; 11 rugs are produced, and sold at $50 each. In the second year, 54 pillows are produced, and sold for $6 each; 12 rugs are produced, and sold at $52 each. In the third year, 60 pillows are produced and sell for $7.00 each; 14 rugs are produced and sold for 64 dollars each. Calculate real GDP for each year and the growth rate of real GDP from year 1 to year 2 and from year 2 to year 3.

Real gross domestic product is a macroeconomic measure of the value of economic output adjusted for…

Answered: or $7.00 dollars each; 14 rugs are…

or $7.00 dollars each; 14 rugs are produced and old for 64 dollars each. Calculate real GDP for ach year and the growth rate of real GDP from ear 1 to year 2 and from year 2 to year 3. .

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

Suppose a simple economy produces only two goods, pillows and rugs. In the first year, 50 pillows are produced, and sold at $5 each; 11 rugs are produced, and sold at $50 each. In the second year, 54 pillows are produced, and sold for $6 each; 12 rugs are produced, and sold at $52 each. In the third year, 60 pillows are produced and sell for $7.00 each; 14 rugs are produced and sold for 64 dollars each. Calculate real GDP for each year and the growth rate of real GDP from year 1 to year 2 and from year 2 to year 3.

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