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1. In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate? GDP = Gross Domestic Product. “Real” signifies it is the “value of all final goods and services produced within the borders of a given country during a given period of time, typically a year” (Pg 467). 2. Is nominal GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period? Is real GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period? Dollars. Current prices during the year they were produced. Dollars. During a given period of time, typically a year. 3. Japan experienced periods of deflation  a declining price level  during the 1990s. During a deflationary period, which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period. Nominal GDP will be higher because it is figured at current prices whereas Real GDP is figured at the deflated base-year prices. Product | Quantity | Price | iPods (Sweaters) | 50 | $40.00 | T-shirt (CDs) | 150 | 15.00 | Bottled Water (sugar) | 600 | 1.00 | Oranges (soft drinks) | 800 | 0.75 |

4. Suppose that a simple economy produces only four goods and services: sweaters, CDs, sugar, and soft drinks. Assume one half of the sugar is used in making the soft drinks and the other half of the sugar is purchased by households. Calculate nominal GDP for this simple economy.
????????? $5150 nominal GDP 5. Over the last 50 years, has the ratio of household production to gross domestic product in the United States increased or decreased? Consider the effect of the increased number of women working outside the home, and the effect of advances in technology in household production such as microwaves, coffee makers, power tools, etc.

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