Assume an economy consumes only two goods: food and clothing. The prices and quantities produced domestically of each good for two different years are shown in the table below. Year 1 quantity Year 2 quantity Year 1 price Year 2 price Food 5000 5500 $2 $5 Clothing 1000 1200 $30 $25 What is the nominal GDP for year 2? What is the real GDP for year 2, using year 1 as the base year? What is the GDP deflator? (2 decimal places)
Assume an economy consumes only two goods: food and clothing. The prices and quantities produced domestically of each good for two different years are shown in the table below. Year 1 quantity Year 2 quantity Year 1 price Year 2 price Food 5000 5500 $2 $5 Clothing 1000 1200 $30 $25 What is the nominal GDP for year 2? What is the real GDP for year 2, using year 1 as the base year? What is the GDP deflator? (2 decimal places)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Measuring A Nation's Income
Section: Chapter Questions
Problem 6PA
Related questions
Question
Expert Solution
Step 1
Given that
Year 1 quantity | Year 2 quantity | Year 1 price | Year 2 price | |
Food | 5000 | 5500 | $2 | $5 |
Clothing | 1000 | 1200 | $30 | $25 |
Year 1 is the base year
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning