endider a simgle eccnomy that produces two goods apples and

endider a simgle eccnomy that produces two goods: apples and oranges. The flowing table shows the prices and quantities of the goods over a three year period Apples Price (Dollars per orange) Price Quantity (Number of oranges) 175 apple) 18) (Number of 115 150 100 Year (Dollars 2009 2010 160 use the rfmnation frem re revus table to ?? H,the flewrg table. Real GDP Year (Doliars) (aseyear 2008, dallars) 2009 2010 Feom 2009 to 2010, sominal GOP and real GDP Why is real GOP a more accurate measure of an economy\'s production than nominal GDP? Real GDP indudes the value of exports, but nominal GDP does not Real GD?is not influenced bv price change, but naninal is. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GOP is not 823

Solution

Year Nnominal GDP Rreal GDP 2008 1105 1105 2009 960 1500 2010 420 1000 From 2009 to 2010, Nominal GDP decreases and real GDP decreases Real GDP is more accurate measure of economy production than nominal GDP: Because: Real GDP is not influenced by price changes but nominal GDP is.