5. Real versus nominal GDPConsider a simple economy that produces two goods: pens and oranges. The following table shows the prices and quantities of the goods over athree-year period.PensOrangesPriceQuantityPriceQuantityYear(Dollars per pen)(Number of pens)(Dollars per orange)(Number of oranges)201811502160201921354230202031104165Use the information from the preceding table to fill in the following table.Nominal GDPReal GDPYear(Dollars)(Base year 2018, dollars)GDP Deflator201820192020From 2019 to 2020, nominal GDPand real GDPThe inflation rate in 2020 wasWhy is real GDP a more accurate measure of an economy's production than nominal GDP?O 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.O Real GDP does not include the value of intermediate goods and services, but nominal GDP does. 6. Limitations of GDPAlthough GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation.Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculatingGDP for the United States? Check all that apply.O Federal government paychecks to soldiersO The loss of enjoyment people incur when scenic land is converted to commercial useO The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the governmentO The quality of goods available to consumersWhen a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases thecomponent of GDP while alsonet exports by the same amount. Therefore, the purchase of woodfrom Brazil causesin US GDP.

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onsider a simple economy that produces two goods: pens and oranges. The following table shows the prices and quantities of the goods ree-year period. Pens Oranges Price Quantity Price Quantity Year (Dollars per pen) (Number of pens) (Dollars per orange) (Number of oranges) 2018 150 2 160 2019 2 135 4 230 2020 3 110 4 165