Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Year 2016 2017 2018 Year 2016 2017 2018 Beers Price (Dollars per beer) 2 2 4 From 2017 to 2018, nominal GDP The inflation rate in 2018 was Quantity (Number of beers) 295 125 120 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2016, dollars) GDP Deflator Price (Dollars per seltzer) 4 4 and real GDP 4 Seltzers Quantity (Number of seltzers) 195 Why is real GDP a more accurate measure of an economy's production than nominal GDP? 225 180 O Real GDP is not influenced by price changes, but nominal GDP is. O Real GDP does not include the value of intermediate goods and services, but nominal GDP does. O 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.
Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Year 2016 2017 2018 Year 2016 2017 2018 Beers Price (Dollars per beer) 2 2 4 From 2017 to 2018, nominal GDP The inflation rate in 2018 was Quantity (Number of beers) 295 125 120 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2016, dollars) GDP Deflator Price (Dollars per seltzer) 4 4 and real GDP 4 Seltzers Quantity (Number of seltzers) 195 Why is real GDP a more accurate measure of an economy's production than nominal GDP? 225 180 O Real GDP is not influenced by price changes, but nominal GDP is. O Real GDP does not include the value of intermediate goods and services, but nominal GDP does. O 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.
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter23: Measuring A Nation's Income
Section: Chapter Questions
Problem 4PA
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