Simple economy that produces two goods

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Consider a simple economy that produces two goods: apples and oranges. The following table shows the prices and quantities of the goods over a three-year period. Year Apples Oranges Price Quantity Price Quantity (Dollars per apple) (Number of apples) (Dollars per orange) (Number of oranges) 2008 1 110 2 150 2009 2 155 4 215 2010 3 120 4 180 Use the information from the previous table to fill in the following table. Year Nominal GDP Real GDP (Dollars) (Base year 2008, dollars) 2008 2009 2010 From 2009 to 2010, nominal GDP , and real GDP . Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. 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. Grade It Now Save & Continue

Reference no: EM13984086

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