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Consider a simple economy that produces two goods: pencils and envelopes. The following table shows the prices and quantities of the goods over a three
Consider a simple economy that produces two goods: pencils and envelopes. The following table shows the prices and quantities of the goods over a threeyear period.
Year
Pencils
Envelopes
Price
Quantity
Price
Quantity
Dollars per pencil
Number of pencils
Dollars per envelope
Number of envelopes
Use the information from the previous table to fill in the following table.
Year
Nominal GDP
Real GDP
GDP Deflator
Dollars
Base year dollars
From to nominal GDP and real GDP
The inflation rate in was
Why is real GDP a more accurate measure of an economy's production than nominal GDP
Real GDP includes the value of exports, but nominal GDP does not.
Real GDP is not influenced by price changes, but nominal GDP is
Real GDP does not include the value of intermediate goods and services, but nominal GDP does.
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