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A small economy produces only two goods: bread and butter. The price and quantity of these goods for the years 2018, 2019 and 2020
A small economy produces only two goods: bread and butter. The price and quantity of these goods for the years 2018, 2019 and 2020 were as follows: Quantity of Bread (per kg) 2018 $1.55 200 2019 $1.50 190 2020 $145 180 Price of Year Bread (per kg) Price of Butter (per kg) $4.00 $4.35 $4.70 Quantity of Butter (per kg) 55 59 64 (a) Calculate nominal GDP for the years 2019 and 2020. Express answers to 2 decimal points. (1 mark) 4 (b) Calculate real GDP in each year using 2018 as the base year. Express answers to 2 decimal points. (1 mark) (c) Calculate the GDP-Deflator for 2019 and 2020. Express answers to 2 decimal points. (1 mark) (d) Calculate the rate of real growth in GDP from 2019 to 2020 (Express your answer to 2 decimal points.) Comment on whether this seems to be a high or low growth rate. and why it might have been obtained. (2 marks)
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To calculate nominal GDP for the years 2019 and 2020 we need to multiply the quantity of each good produced with its respective price in each year a N...Get Instant Access to Expert-Tailored Solutions
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