Real versus Nominal GDP

5. Real versus nominal GDPConsider a simple economy that produces two goods: pencils and muffins. The following table shows the prices and quantities of the goods over a three-year period.PencilsMuffinsPriceQuantityPriceQuantityYear(Dollars per pencil) (Number of pencils) (Dollars per muffin)(Number of muffins)2016211551752017150N1802018100N160Use the information from the preceding table to fill in the following table.Nominal GDPReal GDPYear(Dollars)(Base year 2016, dollars)GDP Deflator201620172018

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