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Consider a simple economy that produces two goods: stickers and donuts. The following table shows the prices and quantities of the goods over a three
Consider a simple economy that produces two goods: stickers and donuts. The following table shows the prices and quantities of the goods over a threeyear period.
tableYearStickers,DonutstablePriceDollars per stickertableQuantityNumber of stickerstablePriceDollars per donuttableQuantityNumber of donuts
Use the information from the preceding table to fill in the following table.
tableNominal GDPReal GDPYearDolarsBase year dollarsGDP Deflator
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 does not include the value of intermediate goods and services, but nominal GDP does.
Real GDP is not influenced by price changes, but nominal GDP is
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.
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