Posted by **mack** on Tuesday, August 10, 2010 at 11:33pm.

1. Use the following information to answer the questions below:

Quantities Produced Prices

CDs Tennis Racquets CDs Tennis Racquets

Year 2004 100 200 20 110

Year 2005 120 210 22 120

a. Calculate real GDP using prices from 2004. By what percent did real GDP grow?

b. Calculate the value of the price index for GDP for 2005 using 2004 as the base year. By what percent did prices increase?

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