1) Suppose that an economy produces only two final goods Orange Mocha Frappuccino (F) and Iced Lattes with extra whip (L). Hey, at least FroYo didn't figure into this one, right? The graphs below describe the economy in two separate years: Year 1: 2021 Iced Latte w/ extra whip Orange Mocha Frappuccino PL S $10 $5 D 50 25 Year 2: 2022 Orange Mocha Frappuccino Iced Latte w/ extra whip PL $10 $10 50 20 Use the graphs to answer the questions on the following page a) What is the nominal GDP of this economy in 2021? What about in 2022? b) What is the real GDP of this economy in 2022, using 2021 as the base year? Calculate the GDP deflator for the year 2022 c) d) On the axes below, sketch and label the aggregate demand curve that corresponds to your answers for (b) and (c). Use numbers!! Remember that the GDP deflator corresponds to the price level, and that the horizontal axis measure real GDP. Price level Real GDP

1) Suppose that an economy produces only two final goods Orange Mocha Frappuccino (F) and Iced Lattes with extra whip (L). Hey, at least FroYo didn't figure into this one, right? The graphs below describe the economy in two separate years: Year 1: 2021 Iced Latte w/ extra whip Orange Mocha Frappuccino PL S $10 $5 D 50 25 Year 2: 2022 Orange Mocha Frappuccino Iced Latte w/ extra whip PL $10 $10 50 20 Use the graphs to answer the questions on the following page a) What is the nominal GDP of this economy in 2021? What about in 2022? b) What is the real GDP of this economy in 2022, using 2021 as the base year? Calculate the GDP deflator for the year 2022 c) d) On the axes below, sketch and label the aggregate demand curve that corresponds to your answers for (b) and (c). Use numbers!! Remember that the GDP deflator corresponds to the price level, and that the horizontal axis measure real GDP. Price level Real GDP

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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