For the Following Question(s), Suppose That an Economy Produces Only

Multiple Choice

For the following question(s) , suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below.

-When we try to measure real GDP and the price level, if we underestimate the growth in real GDP, we will

A) always underestimate the rate of inflation.
B) sometimes underestimate the rate of inflation.
C) always overestimate the rate of inflation.
D) sometimes overestimate the rate of inflation.
E) not be able to measure the rate of inflation.