Suppose, in a year, an economy reports a nominal GDP of $100 billion dollar, a Real GDP of $200 billion and a Real GDP per person of $40,000. Briefly explain why the three measures are different from each other (Specifically, why is nominal GDP less than Real GDP and why is Real GDP per person less than the other two)? Which of the three is a better measure of the entire economy's well-being. Which is a better measure of the standard of living of people in the economy? Explain

Suppose, in a year, an economy reports a nominal GDP of $100 billion dollar, a Real GDP of $200 billion and a Real GDP per person of $40,000. Briefly explain why the three measures are different from each other (Specifically, why is nominal GDP less than Real GDP and why is Real GDP per person less than the other two)? Which of the three is a better measure of the entire economy's well-being. Which is a better measure of the standard of living of people in the economy? Explain

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

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