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Suppose a Small Economy Produces Only Cheese and Fish

Question 142

Multiple Choice

Suppose a small economy produces only cheese and fish.In 2005,20 units of cheese are sold at $5 each,and 8 units of fish are sold at $50 each.In 2004,the base year,the price of cheese was $10 per unit,and the price of fish was $75 per unit.For 2005,


A) nominal GDP is $800, real GDP is $500, and the GDP deflator is 160.
B) nominal GDP is $500, real GDP is $800, and the GDP deflator is 160.
C) nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5.
D) nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5.

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