https://file.aiquickdraw.com/mathbot/file/1727102207393qojjx58h.jpg

Let's break down the given data from the image and analyze the problem:

### Given Data:
- In **2006**:
  - Price index = 100
  - Real GDP = $1,000

- In **2010**:
  - Price index = 110
  - Nominal GDP = $2,200

### To Determine:
- Nominal GDP in 2006
- Real GDP in 2010

### Key Concept:
The relationship between **Nominal GDP**, **Real GDP**, and the **Price Index** can be expressed as:

\[
\text{Nominal GDP} = \frac{\text{Real GDP} \times \text{Price Index}}{100}
\]

Thus, if we know the Real GDP and the Price Index, we can calculate the Nominal GDP, and vice versa.

### Step 1: Nominal GDP in 2006
We already know the Real GDP in 2006 is $1,000 and the price index is 100. Using the formula:

\[
\text{Nominal GDP}_{2006} = \frac{1,000 \times 100}{100} = 1,000
\]

So, the **Nominal GDP in 2006** is $1,000.

### Step 2: Real GDP in 2010
For 2010, we know the nominal GDP ($2,200) and the price index (110). We can rearrange the formula to find the real GDP:

\[
\text{Real GDP}_{2010} = \frac{\text{Nominal GDP}_{2010} \times 100}{\text{Price Index}_{2010}}
\]
\[
\text{Real GDP}_{2010} = \frac{2,200 \times 100}{110} = 2,000
\]

So, the **Real GDP in 2010** is $2,000.

### Conclusion:
The correct option based on the analysis is **B**: 
- Nominal GDP in 2006 = $1,000
- Real GDP in 2010 = $2,000

Would you like further clarification on any part of this solution?

Here are 5 related questions to expand your understanding:
1. How do changes in the price index affect the real GDP over time?
2. What is the significance of nominal vs. real GDP in economic analysis?
3. How do economists adjust for inflation when comparing GDP across years?
4. Can the price index ever decrease, and what does that imply for GDP calculations?
5. How is the GDP deflator different from the Consumer Price Index (CPI)?

**Tip:** Always remember that **nominal GDP** is measured at current market prices, while **real GDP** is adjusted for inflation using a base-year price level.

In an economy, the price index in 2006 was 100 and the real gross domestic product (GDP) was $1,000. In 2010, the price index was 110 and the nominal GDP was $2,200. Based on that information, which of the following can be inferred about the economy’s nominal GDP in 2006 and real GDP in 2010?

Learn how to calculate nominal and real GDP using the price index for an economy in 2006 and 2010. This problem demonstrates GDP concepts in macroeconomics, ideal for high school or introductory college economics students.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation