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(Solution Library) a) Suppose that a simple economy produces only four goods: shoes, hamburgers, shirts, and cotton. Assume that all the cotton is used

Question: a) Suppose that a simple economy produces only four goods: shoes, hamburgers, shirts, and cotton. Assume that all the cotton is used in the production of shirts.

Use the information in the following table to calculate nominal GDP for 2018.

Production and Price Statistics for 2018
Product Quantity Price
Shoes 100 $60.00
Hamburgers 100 2.00
Shirts 50 25.00
Cotton 80 0.60

b) Now use the information in the table below to calculate real GDP for 2018 and 2019, assuming that the base year is 2009.

2009 2018 2019
Product Quantity Price Quantity Price Quantity Price
Shoes 90 $50.00 100 $60.00 100 $65.00
Hamburgers 75 2.00 100 2.00 120 2.25
Shirts 50 30.00 50 25.00 65 25.00
Cotton 100 0.80 800 0.60 120 0.70
  1. What is the growth rate of real GDP during 2019?

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