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Suppose an economy produces only two goods: pizza and video games. a. In general, define the term Gross Domestic Product (GDP). b. Using Year 1

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Suppose an economy produces only two goods: pizza and video games. a. In general, define the term Gross Domestic Product (GDP). b. Using Year 1 as the base year, fill in the table below and, for the economy as a whole, calculate: i. nominal GDP; ii. real GDP; iii. the GDP deflator Price of Price of Quantity of Number of Video Video Nominal Real GDP GDP Year Pizza Games Pizzas GDP Games Deflator $11 $250 300 425 $13 $258 310 570 $12 $260 324 550 $14 $262 410 580

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