Suppose an economy produces only cranberries and maple syrup.In 2010,50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit.In 2009,the base year,the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit.For 2010,

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Quizplus · Accepted Answer

Nominal GDP is the value of all final goods and services produced in an economy in a given year, valued at current prices. In this case, nominal GDP is $1800 (50 units of cranberries x $20 per unit + 100 units of maple syrup x $8 per unit).Real GDP is the value of all final goods and services produced in an economy in a given year, valued at constant prices. In this case, real GDP is $2000 (50 units of cranberries x $10 per unit + 100 units of maple syrup x $15 per unit).The GDP deflator is a measure of the overall price level in an economy. It is calculated by dividing nominal GDP by real GDP and multiplying by 100. In this case, the GDP deflator is 90 ($1800/$2000 x 100).

Suppose an Economy Produces Only Cranberries and Maple Syrup