Economics - Cengage Learning
Economics - Cengage Learning
Economics - Cengage Learning
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ACTIVE LEARNING 1<br />
Answers<br />
C.<br />
D.<br />
Real versus Nominal GDP<br />
§ Inflation can distort economic variables like GDP,<br />
so we have two versions of GDP:<br />
§ Nominal GDP<br />
§ Real GDP<br />
EXAMPLE:<br />
Compute nominal GDP in each year:<br />
2011:<br />
2012:<br />
2013:<br />
Pizza Latte<br />
year P Q P Q<br />
2011 $10 400 $2.00 1000<br />
2012 $11 500 $2.50 1100<br />
2013 $12 600 $3.00 1200<br />
23<br />
Increase:<br />
24<br />
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