An Economy Produces Only Eggs and Ham

question 68

Multiple Choice

An economy produces only eggs and ham. Last year, it produced 100 units of eggs at $3 each and 50 units of ham at $4 each. If in the base year eggs sold for $1.50 per unit and ham sold for $5 per unit, what can we conclude?

• A) Nominal GDP is $500, real GDP is $400, and the GDP deflator is 80.
• B) Nominal GDP is $500, real GDP is $400 and the GDP deflator is 125.
• C) Nominal GDP is $400, real GDP is $500, and the GDP deflator is 80.
• D) Nominal GDP is $400, real GDP is $500, and the GDP deflator is 125.

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Definitions:

Hematopoiesis

The production of blood cells and platelets, which occurs in the bone marrow.

Bone Marrow

The soft, fatty tissue inside bones that produces blood cells.

Vertebrae

The individual bones that form the vertebral column (spine), providing structural support and protecting the spinal cord.

Lumbar

Relating to the lower part of the spine, composed of five vertebrae between the rib cage and the pelvis, often associated with back pain when referencing the anatomical area.