Suppose, in a year, an economy reports a nominal GDP of $100 billion dollar, a Real GDP of $200 billion and a Real GDP per person of $40,000. Briefly explain why the three measures are different from each other (Specifically, why is nominal GDP less than Real GDP and why is Real GDP per person less than the other two)? Which of the three is a better measure of the entire economy's well-being. Which is a better measure of the standard of living of people in the economy? Explain
Suppose, in a year, an economy reports a nominal GDP of $100 billion dollar, a Real GDP of $200 billion and a Real GDP per person of $40,000. Briefly explain why the three measures are different from each other (Specifically, why is nominal GDP less than Real GDP and why is Real GDP per person less than the other two)? Which of the three is a better measure of the entire economy's well-being. Which is a better measure of the standard of living of people in the economy? Explain
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter15: Measuring A Nation's Income
Section: Chapter Questions
Problem 6CQQ
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