Suppose an economy's production consists only of corn and soybeans.In 2010,20 bushels of corn are sold at $4 per bushel and 10 bushels of soybeans are sold at $2 per bushel.In 2009,the price of corn was $2 per bushel and the price of soybeans was $1 per bushel.Using 2009 as the base year,it follows that,for 2010,

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Quizplus · Accepted Answer

To calculate nominal GDP, we need to multiply the quantities of each good by their respective prices and sum them up.

Nominal GDP in 2010 = (20 bushels of corn x $4/bushel) + (10 bushels of soybeans x $2/bushel) = $80 + $20 = $100

To calculate real GDP, we need to use the prices from the base year (2009) instead of the current year (2010) prices.

Real GDP in 2010 = (20 bushels of corn x $2/bushel) + (10 bushels of soybeans x $1/bushel) = $40 + $10 = $50

The GDP deflator is the ratio of nominal GDP to real GDP, multiplied by 100.

GDP deflator in 2010 = (Nominal GDP / Real GDP) x 100 = ($100 / $50) x 100 = 200

Therefore, the best choice is D, with nominal GDP of $100, real GDP of $50, and a GDP deflator of 200.

Suppose an Economy's Production Consists Only of Corn and Soybeans