Multiple Choice
Suppose an economy produces only strawberries and ice cream. Last year, 50 units of strawberries are sold at $2 per unit, and 100 units of ice cream are sold at $4 per unit. If the price of strawberries was $1 per unit and the price of ice cream was $2 per unit in the base year, what can we conclude?
A) Nominal GDP is $500, real GDP is $250, and the GDP deflator is 50.
B) Nominal GDP is $350, real GDP is $500, and the GDP deflator is 50.
C) Nominal GDP is $350, real GDP is $500, and the GDP deflator is 200.
D) Nominal GDP is $500, real GDP is $250, and the GDP deflator is 200.
Correct Answer:
Verified
Correct Answer:
Verified
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