Consider a simple economy that produces two goods: pencils and erasers. The following table shows the prices and quantities of the goods over a three-year period. Year Pencils Erasers Price Quantity Price Quantity (Dollars per pencil) (Number of pencils) (Dollars per eraser) (Number of erasers) 2016 2 115 5 175 2017 4 150 2 180 2018 1 100 2 160   Use the information from the preceding table to fill in the following table. Year Nominal GDP Real GDP GDP Deflator (Dollars) (Base year 2016, dollars) 2016       2017       2018         From 2017 to 2018, nominal GDP    , and real GDP    .   The inflation rate in 2018 was    .   Why is real GDP a more accurate measure of an economy's production than nominal GDP?   Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.   Real GDP is not influenced by price changes, but nominal GDP is.   Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

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Q: 1. Briefly explain the following terms Nominal GDP, Real GDP, Base Year,

A: Hi, Thanks for the question. As per the guidelines, we are allowed to attempt the first three…

Q: Year Pens   Erasers     Price Quantity Price Quantity   (Dollars per pen) (Number of…

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A: Gross domestic product (GDP) is the monetary value of all final goods and services produced within a…

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A: Real GDP and Nominal GDP are two different ways of calculating Gross domestic product.

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A:

Q: Consider a simple economy that produces two goods: pens and muffins. The following table shows the…

A: Nominal GDP is the market value of goods and services produced by the economy during a given period…

Q: Consider a simple economy that produces two goods: pens and erasers. The following table shows the…

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A: GDP is the value of final goods and services produced in the economy within a given period of time.

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