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Imagine that an economy produces two goods, hot dogs and baseballs. In the year 2000 the economy produces 20 hot dogs and 15 baseballs, and
Imagine that an economy produces two goods, hot dogs and baseballs. In the year 2000 the economy produces 20 hot dogs and 15 baseballs, and the prices of hot dogs and baseballs were $2 and $5, respectively. In the year 2001 the economy produces 25 hot dogs and 20 baseballs, and the prices of hot dogs and baseballs were $3 and $6, respectively. Note: Year 2000 is the base year.
- Calculate NGDP for 2000.
- Calculate RGDP for 2001.
- What is the economic growth from 2000 to 2001?
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