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Consider a simple economy in which only two goods are produced and sold: pizza and beer. The prices and quantities produced of these two goods
Consider a simple economy in which only two goods are produced and sold: pizza and beer. The prices and quantities produced of these two goods over a three-year period are shown in the table below. 2011 is the base year Year Price of Pizza Quantity of Pizza Price of Beer Quantity of Beer 2009 $2 $1 2 2010 $4 $2 12 2011 $4 2 $2 Calculate the Nominal GDP and Real GDP of 2009 and 2010. What is the inflation rate in 2011 using the GDP deflator
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