Table 10-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.Prices and Quantities
$$\begin{array} { c c c c c }
\text { Year } & \text { Price of } & \text { Quantity af } & \text { Price af } & \text { Quantity af } \
& \text { Waffles } & \text { Waffles } & \text { Pancalkes } & \text { Pancalkes } \
\hline 2008 & \$ 2.00 & 100 & \$ 1.00 & 100 \
2009 & \$ 2.00 & 120 & \$ 2.00 & 150 \
2010 & \$ 2.00 & 150 & \$ 3.00 & 200 \
2011 & \$ 4.00 & 180 & \$ 3.00 & 220
\end{array}$$
-Refer to Table 10-6. In 2008, this country's real GDP was

Question

Table 10-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.Prices and Quantities
 $$\begin{array} { c c c c c } 
\text { Year } & \text { Price of } & \text { Quantity af } & \text { Price af } & \text { Quantity af } \
& \text { Waffles } & \text { Waffles } & \text { Pancalkes } & \text { Pancalkes } \
\hline 2008 & \$ 2.00 & 100 & \$ 1.00 & 100 \
2009 & \$ 2.00 & 120 & \$ 2.00 & 150 \
2010 & \$ 2.00 & 150 & \$ 3.00 & 200 \
2011 & \$ 4.00 & 180 & \$ 3.00 & 220
\end{array}$$
-Refer to Table 10-6. In 2008, this country's real GDP was

Quizplus · Accepted Answer

To calculate real GDP, we need to use base year prices. Therefore, we need to calculate the nominal GDP for 2008 and then adjust it for inflation using 2009 prices. Nominal GDP for 2008 is $2.00 x 100 + $1.00 x 100 = $300. To calculate real GDP, we use the GDP deflator, which is the ratio of nominal GDP to real GDP multiplied by 100. In 2009, the GDP deflator is ($2.00 x 120 + $2.00 x 150) / ($2.00 x 120 + $1.00 x 150) x 100 = 104. If we adjust the nominal GDP for inflation using the GDP deflator, we get the real GDP for 2008 as $300 / 1.04 = $288.46, which is closest to $400. Therefore, the best choice is C.

Table 10-6 the Table Below Contains Data for the Country

Table 10-6
the Table Below Contains Data for the Country