The prices of some goods went up more than the prices

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Unformatted text preview: of every single good or service went up 43 percent during this period. The prices of some goods went up more than the prices of other goods, and the prices of some goods actually fell. Here is the percentage increase or decrease in the prices of a few selected items during this time period. In particular, notice what happened to college tuition. B Food and beverages New cars Prescription drugs Hospital services Men’s clothes Women’s clothes Airline fares Cable TV College tuition 298 Chapter 11 Measuring Economic Performance ↑ 36% ↑ 10 ↑ 80 ↑ 121 ↓ 1.6 ↓ 7.4 ↑ 56 ↑ 95 ↑ 130 Real GDP is shown in column 5. To calculate it, we multiply the price of watches in our chosen base year of 1987 by the currentyear quantity. For example, to get real GDP in 2003, we take the quantity of watches produced in 2003 and multiply it by the price of watches in 1987. A quick look at real GDP figures tells us that because real GDP in 2004 ($40,000) is higher than that in 2003 ($38,000), the quantit...
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This document was uploaded on 01/16/2014.

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