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Suppose the following data describe output in two different years:
Items Year 1 Year 2
Apples 20,000 @ $0.25 each 30,000 @ $0.30 each
Bicycles 700 @ $800 each 700 @ $800 each
Apps 10,000 @ $1.00 each 12,000 @ $2.00 each
a)Compute nominal GDP in each year
b)By what percentage did nominal GDP change between Year 1 and Year 2?
c) Now compute the GDP in Year 2 by using the prices of Year 1.
d) By what percentage did real GDP increase between Year 1 and Year 2?
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