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1 . Suppose the economy produced 2 goods: baseballs and tennis balls. In the third quarter of 2 0 2 3 ( the base period

1. Suppose the economy produced 2 goods: baseballs and tennis balls. In the third quarter of
2023(the base period),6300 baseballs were produced at a value of $18 per baseball, while
4800 tennis balls were produced at a value of $6 per tennis ball. Meanwhile, in the third
quarter of 2024,6800 baseballs were produced at a value of $20 per baseball, while 5700
tennis balls were produced at a value of $8 per tennis ball. (44 points)
a. Solve for the nominal and real GDP in the third quarter of 2023.(11 points)
b. Solve for the nominal and real GDP in the third quarter of 2024.(16 points)
c. Solve for the growth rate of real GDP between the third quarter of 2023 and the third quarter of 2024. What does this growth rate indicate or mean? In other words, what causes the real GDP value to increase? (9 points)
d. Solve for the GDP price index in the third quarter of 2023 and in the third quarter of 2024.(8 points)

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