-The Table Above Shows Real and Nominal GDP for Two

question 23

Essay

$$\begin{array} { l c c } { \text { GDP } } & \begin{array} { c } \text { Data for 2008 } \\\text { (billions of dollars) }\end{array} & \begin{array} { c } \text { Data for 2009 } \\\text { (billions of dollars) }\end{array} \\\hline \text { Nominal GDP } & 3,300 & 4,200 \\\text { Real GDP } & 3,300 & 3,600 \\\hline\end{array}$$
-The table above shows real and nominal GDP for two years.
a. What does the GDP price index equal in 2008?
What does the value of the GDP price index tell you about 2008?
b. What does the GDP price index equal in 2009?

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Definitions:

Marginal Costs

The increase in total cost that arises from producing one additional unit of a good or service.

Output

The amount of goods or services produced by a company, industry, or economy within a certain period.

Variable Costs

Costs that vary directly with the level of output, such as raw materials and direct labor expenses.

Labor

The human effort, either physical or mental, employed in the production of goods and services.