\begin{tabular}{|c|c|c|c|c|}
\hline Good & \begin{tabular}{l}
Quantity produced in \
2016
\end{tabular} & \begin{tabular}{l}
Price in \
2016
\end{tabular} & \begin{tabular}{l}
Quantity produced in \
2017
\end{tabular} & \begin{tabular}{l}
Price in \
2017
\end{tabular} \
\hline Guitars & 20 & $\$ 50$ & 20 & $\$ 75$ \
\hline \begin{tabular}{l}
Physics \
books
\end{tabular} & 100 & $\$ 55$ & 100 & $\$ 60$ \
\hline Sandals & 100 & $\$ 20$ & 100 & $\$ 25$ \
\hline
\end{tabular}

Production and prices in the nation of Justinia in 2016 and 2017 are shown in the table above.

Which of the following best describes what happened to real GDP and nominal GDP between 2016 and $2017 ?$

Choose 1 answer:
(A) Real GDP increased; Nominal GDP has decreased
(B) Real GDP has not changed; nominal GDP has not changed
(c) Real GDP increased; nominal GDP decreased
(D) Real GDP has not changed; nominal GDP increased
(E) Real GDP increased; nominal GDP increased

Question

\begin{tabular}{|c|c|c|c|c|}
\hline Good & \begin{tabular}{l} 
Quantity produced in \
2016
\end{tabular} & \begin{tabular}{l} 
Price in \
2016
\end{tabular} & \begin{tabular}{l} 
Quantity produced in \
2017
\end{tabular} & \begin{tabular}{l} 
Price in \
2017
\end{tabular} \
\hline Guitars & 20 & $\$ 50$ & 20 & $\$ 75$ \
\hline \begin{tabular}{l} 
Physics \
books
\end{tabular} & 100 & $\$ 55$ & 100 & $\$ 60$ \
\hline Sandals & 100 & $\$ 20$ & 100 & $\$ 25$ \
\hline
\end{tabular}

Production and prices in the nation of Justinia in 2016 and 2017 are shown in the table above.

Which of the following best describes what happened to real GDP and nominal GDP between 2016 and $2017 ?$

Choose 1 answer:
(A) Real GDP increased; Nominal GDP has decreased
(B) Real GDP has not changed; nominal GDP has not changed
(c) Real GDP increased; nominal GDP decreased
(D) Real GDP has not changed; nominal GDP increased
(E) Real GDP increased; nominal GDP increased

Accepted Answer

***D*** ∻Key Concept∻ ⚹Real vs Nominal GDP⚹ ∻Explanation∻ ⚹Nominal GDP is the value of goods and services produced in an economy at current prices, while real GDP is adjusted for inflation and reflects the value at constant prices. In the given scenario, while the quantity of goods produced did not change from 2016 to 2017, the prices of those goods increased, leading to an increase in nominal GDP. Since the quantity produced—the physical volume of goods—remained the same, real GDP did not change.⚹◊What is the formula to calculate Nominal⍭ Generate me a similar question◊

Good	Quantity produced in 2016	Price in 2016	Quantity produced in 2017	Price in 2017
Guitars	20	$\$ 50$	20	$\$ 75$
Physics books	100	$\$ 55$	100	$\$ 60$
Sandals	100	$\$ 20$	100	$\$ 25$

Sia