ctice the Model
1. In 2020, an economy produced only two goods, snarks and beans. It produced 100 snarks which
sold for $2 each and 200 beans which sold for $3 each. In 2021, the same economy produced 150
snarks which sold for $3 each and 250 beans which sold for $4 each.
a) Calculate nominal GDP in both years.
b) Calculate the real GDP for both years, using 2020 prices.
c) Calculate the growth rate in real GDP from 2020 to 2021.