The Table Below Shows the Price Indexes and the Nominal

question 16

Multiple Choice

The table below shows the price indexes and the nominal gross domestic product (GDP) for an economy from 2001 to 2005.The real GDP _____ between 2004 and 2005.
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Table 6.3
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$$\begin{array} { c c c } \text { Year } & \text { Price Index } & \text { Nominal GDP } \\\hline 2001 & 100 & \$ 95 \text { billion } \\2002 & 105 & \$ 110 \text { billion } \\2003 & 110 & \$ 120 \text { billion } \\2004 & 120 & \$ 125 \text { billion } \\2005 & 132 & \$ 137.5 \text { billion }\end{array}$$

• A)increased by about $5 billion
• B)decreased by about $5 billion
• C)remained almost constant
• D)increased by about $2 billion
• E)decreased by about $2 billion

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Definitions:

Midpoint Formula

A method used in economics to calculate the percentage change in a variable by dividing the change by the average of the initial and final values.

Price Elasticity

A measure of the sensitivity of quantity demanded or supplied to a change in price, indicating how a price change can affect market dynamics.

Absolute Value

The non-negative value of a number without regard to its sign.

Demand Schedule

A table that shows the quantity of a good that consumers are willing and able to purchase at various prices.