Consider a simple economy that produces two goods: cupcakes and erasers. The following table shows the prices and quantities for the goods over a three-year period.

Year	Cupcakes		Erasers
	Price	Quantity	Price	Quantity
	(Dollars per cupcake)	(Number of cupcakes)	(Dollars per eraser)	(Number of erasers)
2008	1	110	2	150
2009	2	155	4	215
2010	3	120	4	180

Use the information from the previous table to fill in the following table.

Year	Nominal GDP	Real GDP	GDP Deflator
	(Dollars)	(Base year 2008, Dollars)
2008
2009
2010

From 2009 to 2010, nominal GDPwas ____and real gdp was ______

The inflation rate in 2010 was .

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

Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

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 is not influenced by price changes, but nominal GDP is.