Consider a simple economy that produces two goods: plastic cups and seltzers. The following table shows the prices and quantities of the goods over athree-year period.20192020PriceQuantityPriceQuantityYear (Dollars per plastic cup) (Number of plastic cups) (Dollars per seltzer) (Number of seltzers)2018218042104160Year201822420192020Use the information from the preceding table to fill in the following table.Nominal GDPReal GDP(Dollars) (Base year 2018, dollars) GDP DeflatorPlastic cupsFrom 2019 to 2020, nominal GDPThe inflation rate in 2020 was295140145and real GDPSeltzersWhy is real GDP a more accurate measure of an economy's production than nominal GDP?Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.Real GDP is not influenced by price changes, but nominal GDP is.Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods andservices an economy consumes.

A summation of countries'final goods and services is known as Gross domestic product.. It measures…

Year 2018 2019 2020 (Dollars) EM (Base year 2018, dollars) From 2019 to 2020, nominal GDP The inflation rate in 2020 was GDP Deflator UQ and real GDP Why is real GDP a more accurate measure of an economy's production than nominal GDP? Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP is not influenced by price changes, but nominal GDP is. Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.

Year 2018 2019 2020 (Dollars) EM (Base year 2018, dollars) From 2019 to 2020, nominal GDP The inflation rate in 2020 was GDP Deflator UQ and real GDP Why is real GDP a more accurate measure of an economy's production than nominal GDP? Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP is not influenced by price changes, but nominal GDP is. Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

16. Nominal GDP differs from real GDP because nominal GDP is based on constant pricesreal GDP is based on current pricesreal GDP is adjusted for changes in the price levelnominal GDP is adjusted for changes in the price level
GDP in the U.S. in 2000 was $10.1 trillion dollars and GDP in 2008 was $14.3 trillion. The CPI in 2000 was 172.2 and the CPI in 2008 was 215.3 (The CPI in 2009 was 214.5) What was Real GDP in 2008 (in 2009 $)? $14.25 trillion $11.48 trillion $17.81 trillion $14.35 trillion Question 30 (S What was the economic growth rate between 2000 and 2008? Growth rate= RGDP (2)-RGDP (1) 100 RGDP (1) A
3. Consider an economy that only produces mittens. In Year 1, 4000 pairs of mittens are produced and the price is $5 per pair. In the Year 2, 5000 pairs of mittens are produced and the price is $7 per pair. In Year 3, 7000 pair of mittens are produced and the price is $9 per pair. Use Year 1 as the base year. What is the nominal GDP for each year? What is the real GDP for each year? What is the GDP deflator for each year? What is the percentage growth rate of real GDP from year 2 to year 3? What is the inflation rate (as measured by the GDP deflator) from year 2 to year 3?
Consider a simple economy that produces two goods: plastic cups and donuts. The following table shows the prices and quantities of the goods over a three-year period. Plastic cups Donuts Price Quantity Price Quantity Year (Dollars per plastic cup) (Number of plastic cups) (Dollars per donut) (Number of donuts) 2018 2 215 3 155 2019 4. 135 3 210 2020 2 150 3 190 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year 2018, dollars) GDP Deflator Year 2018 2019 2020 From 2019 to 2020, nominal GDP and real GDP The inflation rate in 2020 was
First, define nominal GDP and real GDP. Second, is it possible for nominal GDP in a year to be less than real GDP in the same year? Explain. (100 words max)
Use following data to answer following questions. A country produces only milk and honey. The base Year 2016 2017 2018 Price of Milk $1 $2 $3 Quantity of Milk 100 Quarts 200 Quarts 200 Quarts year is 2016. Price of Honey $2 $2 $4 Quantity of Honey 50 Quarts 100 Quarts 100 Quarts C):1 a. Calculate the nominal GDP for 2016, 2017 and 2018. b. Calculate real GDP for 2016, 2017, and 2018. c. Calculate growth rate of nominal and real GDP for 2017 and 2018. d. Are nominal and real GDPs same for a given year? Please explain. e. Calculate the inflation rates for 2017 and 2018 using GDP deflator method.