The table below contains data for the country of Batterland, which produces only
ID: 1174197 • Letter: T
Question
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.
Prices and Quantities
Year
Price of
Waffles
Quantity of Waffles
Price of Pancakes
Quantity of
Pancakes
2008
$2.00
100
$1.00
100
2009
$2.00
120
$2.00
150
2010
$2.00
150
$3.00
200
2011
$4.00
180
$3.00
220
Refer to Table 1. In 2008, this country's GDP deflator was
75.
100.
133.3.
This cannot be calculated from the information given.
Year
Price of
Waffles
Quantity of Waffles
Price of Pancakes
Quantity of
Pancakes
2008
$2.00
100
$1.00
100
2009
$2.00
120
$2.00
150
2010
$2.00
150
$3.00
200
2011
$4.00
180
$3.00
220
Explanation / Answer
Ans: 75
Explanation:
Nominal GDP in 2008 = ($2 * 100) + ($1 * 100) = $300
Real GDP in 2008 = ($2 * 100) + ($2 * 100) = $400
Note: Real GDP = Base year price * current year quantity
GDP defloter = (NGDP / RGDP) * 100
= (300 / 400) * 100
= 75
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