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# nly produces two goods, A and B' The quantity of good A produced in year t is given by x? and the quantity of good B produced in year t is given by x?...

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(1) Consider a nation that only produces two goods, A and B‘ The quantity of good A
produced in year t is given by x? and the quantity of good B produced in year t is given
by x? . Their respective prices each unit of each good is sold in year t is given by P54 and
P153 respectively. Then, consider if both prices doubled in year t+1, but the quantities of
each good produced remained the same. 0 a‘ Show that nominal GDP for this nation doubles in year t+1. .4
b. Show that ﬁxed weighted real GDP is identical in both years by using year t
prices as the base. .4 c. Show that ﬁxed weighted real GDP is identical in both years by using year t+1
prices as the base. .4 .1

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