Question

5. Real versus nominal GDP Consider a simple economy that produces two goods: coffees and enamel pins. The following table shows the prices and quantities of the goods over a three-year period. Coffees Enamel pins Price Quantity Price Quantity Year (Dollars per coffee) (Number of coffees) (Dollars per enamel pin) (Number of enamel pins) 2017 2 245 1 175 2018 4 150 2 210 2019 2 135 2 180 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP Year (Dollars) (Base year 2017, dollars) GDP Deflator 2017 2018 2019 From 2018 to 2019, nominal GDP , and real GDP . The inflation rate in 2019 was . Why is real GDP a more accurate measure of an economy's production than nominal GDP? 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. Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

          5. Real versus nominal GDP
Consider a simple economy that produces two goods: coffees and enamel pins. The following table shows the prices and quantities of the goods over a
three-year period.
Coffees
Enamel pins
Price
Quantity
Price
Quantity
Year
(Dollars per coffee)
(Number of coffees)
(Dollars per enamel pin)
(Number of enamel pins)
2017
2
245
1
175
2018
4
150
2
210
2019
2
135
2
180
Use the information from the preceding table to fill in the following table.
Nominal GDP
Real GDP
Year
(Dollars)
(Base year 2017, dollars)
GDP Deflator
2017
2018
2019
From 2018 to 2019, nominal GDP , and real GDP .
The inflation rate in 2019 was .
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
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.
Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

5. Real versus nominal GDP
Consider a simple economy that produces two goods: coffees and enamel pins. The following table shows the prices and quantities of the goods over a
three-year period.
Coffees
Enamel pins
Price
Quantity
Price
Quantity
Year
(Dollars per coffee)
(Number of coffees)
(Dollars per enamel pin)
(Number of enamel pins)
2017
2
245
1
175
2018
4
150
2
210
2019
2
135
2
180
Use the information from the preceding table to fill in the following table.
Nominal GDP
Real GDP
Year
(Dollars)
(Base year 2017, dollars)
GDP Deflator
2017
2018
2019
From 2018 to 2019, nominal GDP , and real GDP .
The inflation rate in 2019 was .
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
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.
Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

Added by Erin H.

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