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Consider a simple economy that produces two goods: plastic cups and donuts. The following table shows the prices and guantities of the goods over a
Consider a simple economy that produces two goods: plastic cups and donuts. The following table shows the prices and guantities of the goods over a thres-year period. Plastic cups Donuts Price Quantity Price Quantity Year (Dollars per plastic cup) (Number of plastic cups) (Dollars per donut) (Number of donuts) 2018 2 255 2 195 2019 3 165 3 190 2020 2 130 3 195 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP Year (Dollars) (Base year 2018, dollars) GDP Deflator From 2019 to 2020, nominal GDP w , and real GDP v . The inflation rate in 2020 was v . Why is real GDP a more accurate measure of an economy's production than nominal GDP? () Real GDP does net 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. (O Real GDP is not influenced by price changes, but nominal GDP is
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