Assume an Economy Produces Just Cars and Computers; Use the Information

question 14

Essay

Assume an economy produces just cars and computers; use the information in the table below to answer the following questions about the GDP.
$$\begin{array} { | l | l | c | l | c | } \hline & { \text { Cars } } & & { \text { Camputers } } \\\hline \text { Year } & \text { Quantity } & \text { Price } & { \text { Quantity } } & \text { Price } \\\hline 2009 & 100 & \$ 10,000 & 1,000 & \$ 1,000 \\\hline 2010 & 110 & \$ 12,000 & 1,100 & \$ 900 \\\hline\end{array}$$ (1)Calculate nominal GDP in 2009 and 2010.What is the growth rate in nominal GDP?
(2)Using 2009 as a base year,calculate real GDP in 2010.What is the growth rate in real GDP?
(3)Calculate the GDP deflator in 2010.

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Definitions:

Heuristic Processing

A method of decision-making or reasoning based on simplified strategies or 'rules of thumb', rather than systematic analysis.

Statistically Identical

Refers to two or more variables that have no statistically significant difference between them, indicating they can be considered equivalent for analytical purposes.

Treatment Options

Refers to the various methods available for addressing or managing a medical condition or disease.

Unconscious

The part of the mind that is inaccessible to the conscious mind but affects behavior and emotions.