Question

Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a three-year period Pencils Oranges Price Price Quantity Quantity (Number of pencils) 110 155 120 (Dollars per pencil) (Dollars per orange) (Number of oranges) Year 2012 2013 2014 150 215 180 Use the information from the preceding table to fill in the following table Real GDP (Base year 2012, dollars) Nominal GDP (Dollars) GDP Deflator Year 2012 2013 2014 From 2013 to 2014, nominal GDP and real GDP The inflation rate in 2014 was Why is real GOP a more accurate measure of an economy's production than nominal GOP OReal GDP measures the value of the goods and services an economy produces, but nominal GOP measures the value of the goods and services an economy consumes OReal GDP does not indlude the value of intermediate goods and services, but nominal GDP does. OReal GOP is not influenced by price changes, but nominal GDP Is

Answer 1