Business, 06.03.2020 23:53 jadejordan8888

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

Year
Apples

Oranges

Price Quantity Price Quantity
(Dollars per apple) (Number of apples) (Dollars per orange) (Number of oranges)
2012 1 110 1 180
2013 2 140 4 210
2014 4 100 4 190
Use the information from the preceding table to fill in the following table.

Year Nominal GDP Real GDP GDP Deflator
(Dollars) (Base year 2012, dollars)
2012
2013
2014
From 2013 to 2014, nominal GDP , and real GDP .

The inflation rate in 2014 was .

Why is real GDP a more accurate measure of an economy's production than nominal GDP?

a) Real GDP includes the value of exports, but nominal GDP does not.

b) Real GDP is not influenced by price changes, but nominal GDP is.

c) 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.

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Consider a simple economy that produces two goods: apples and oranges. The following table shows the...

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