1. Question 1 Refer to Table 23-5. In 2016, this country\'s Table 23-5 The count

Question

1. Question 1 Refer to Table 23-5. In 2016, this country's Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices ofthese goods for the last several years are shown below. The base year is 2015 Prices and Quantities Price of Cereal Quantity of Cereal of Year Price of Milk Priceof Cerea 2015 2016 2017 2018 $4.00 $5.00 $6.00 120 150 180 $2.00 $2.50 $3.50 Milk 180 200 200 240 O A. real GDP was $880, and the GDP deflator was 111.4 OB. real GDP was $780, and the GDP deflator was 88.6 O C. real GDP was $880, and the GDP defnator was 112.8 O D. real GDP was $780, and the GDP deflator was 112.8

Explanation / Answer

2016 real GDP

=4*120+1.50*200

=780

nominal GDP 2016

=4*120+2*200

=880

GDP deflator=nominal GDP/real GDP*100

=(880/780)*100

=112.8

so answer will be D. real GDP was 780 and the GDP deflator was 112.8

the above is answer..

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