5. Real versus nominal GDPConsider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over athree-year period.Year201620172018Year201620172018Price(Dollars per beer)224BeersNominal GDP(Dollars)Quantity(Number of beers)295Use the information from the preceding table to fill in the following table.From 2017 to 2018, nominal GDPThe inflation rate in 2018 was125120Price(Dollars per seltzer)4Real GDP(Base year 2016, dollars) GDP Deflator44, and real GDPSeltzersQuantity(Number of seltzers)195Why is real GDP a more accurate measure of an economy's production than nominal GDP?225180Real GDP is not influenced by price changes, but nominal GDP is.O Real GDP does not include the value of intermediate goods and services, but nominal GDP does.O Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods andservices an economy consumes.

Nominal GDP measures the value of goods and goods and services produced in the economy at current…

Consider a simple economy that produces two goods: beers and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Year 2016 2017 2018 Year 2016 2017 2018 Beers Price (Dollars per beer) 2 2 4 From 2017 to 2018, nominal GDP The inflation rate in 2018 was Quantity (Number of beers) 295 125 120 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2016, dollars) GDP Deflator Price (Dollars per seltzer) 4 4 and real GDP 4 Seltzers Quantity (Number of seltzers) 195 Why is real GDP a more accurate measure of an economy's production than nominal GDP? 225 180 O Real GDP is not influenced by price changes, but nominal GDP is. O Real GDP does not include the value of intermediate goods and services, but nominal GDP does. O Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.