sider a simple economy that produces two goods: pens and muffins. The following table shows the prices and quantities of the goods over a three- ar period. Pens Muffins Price Quantity Price Quantity Year (Dollars per pen) (Number of pens) (Dollars per muffin) (Number of muffins) 2016 2 125 3 155 2017 4 135 3 210 2018 2 125 3 165 e the information from the preceding table to fill in the following table. Nominal GDP Real GDP ear (Dollars) (Base year 2016, dollars) GDP Deflator 016 017 018 m 2017 to 2018, nominal GDP and real GDP

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
**The inflation rate in 2018 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.
- Real GDP includes the value of exports, but nominal GDP does not.
- Real GDP is not influenced by price changes, but nominal GDP is.
Transcribed Image Text:**The inflation rate in 2018 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. - Real GDP includes the value of exports, but nominal GDP does not. - Real GDP is not influenced by price changes, but nominal GDP is.
# 5. Real versus Nominal GDP

Consider a simple economy that produces two goods: pens and muffins. The following table shows the prices and quantities of the goods over a three-year period.

| Year | Pens Price (Dollars per pen) | Pens Quantity (Number of pens) | Muffins Price (Dollars per muffin) | Muffins Quantity (Number of muffins) |
|------|-------------------------------|--------------------------------|-----------------------------------|--------------------------------------|
| 2016 | 2                             | 125                            | 3                                 | 155                                  |
| 2017 | 4                             | 135                            | 3                                 | 210                                  |
| 2018 | 2                             | 125                            | 3                                 | 165                                  |

Use the information from the preceding table to fill in the following table.

| Year | Nominal GDP (Dollars) | Real GDP (Base year 2016, dollars) | GDP Deflator |
|------|-----------------------|------------------------------------|--------------|
| 2016 |                       |                                    |              |
| 2017 |                       |                                    |              |
| 2018 |                       |                                    |              |

From 2017 to 2018, nominal GDP ______, and real GDP ______.
Transcribed Image Text:# 5. Real versus Nominal GDP Consider a simple economy that produces two goods: pens and muffins. The following table shows the prices and quantities of the goods over a three-year period. | Year | Pens Price (Dollars per pen) | Pens Quantity (Number of pens) | Muffins Price (Dollars per muffin) | Muffins Quantity (Number of muffins) | |------|-------------------------------|--------------------------------|-----------------------------------|--------------------------------------| | 2016 | 2 | 125 | 3 | 155 | | 2017 | 4 | 135 | 3 | 210 | | 2018 | 2 | 125 | 3 | 165 | Use the information from the preceding table to fill in the following table. | Year | Nominal GDP (Dollars) | Real GDP (Base year 2016, dollars) | GDP Deflator | |------|-----------------------|------------------------------------|--------------| | 2016 | | | | | 2017 | | | | | 2018 | | | | From 2017 to 2018, nominal GDP ______, and real GDP ______.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Knowledge Booster
Marketing Plan
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education