(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. The growth of nominal GDP from 2018 to 2019 was due to an approximately _____ increase in prices and an approximately _____ increase in aggregate output. $$\begin{array} { | l | l | l | l | l | }
\hline & \text { 2018 Output } & \text { 2018 Prices } & \text { 2019 Output } & \text { 2019 Prices } \
\hline \text { Lemonade } & \text { 200 glasses } & \text { \$1 per glass } & 220 \text { glasses } & \text { \$1 per glass } \
\hline \text { Cookies } & 100 \text { cookies } & \text { \$2 per cookie } & 100 \text { cookies } & \text { \$2.25 per cookie } \
\hline
\end{array}$$
A)11.25%; 0%.
B)11.25%; 0%
C)0%; 45%.
D)0%; 45%
E)5%; 11.25%.
F)5%; 11.25%
G)6.25%; 5%
H)6.25%; 5%.

Question

(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. The growth of nominal GDP from 2018 to 2019 was due to an approximately _____ increase in prices and an approximately _____ increase in aggregate output. $$\begin{array} { | l | l | l | l | l | } 
\hline & \text { 2018 Output } & \text { 2018 Prices } & \text { 2019 Output } & \text { 2019 Prices } \
\hline \text { Lemonade } & \text { 200 glasses } & \text { \$1 per glass } & 220 \text { glasses } & \text { \$1 per glass } \
\hline \text { Cookies } & 100 \text { cookies } & \text { \$2 per cookie } & 100 \text { cookies } & \text { \$2.25 per cookie } \
\hline
\end{array}$$
A)11.25%; 0%.
B)11.25%; 0%
C)0%; 45%.
D)0%; 45%
E)5%; 11.25%.
F)5%; 11.25%
G)6.25%; 5%
H)6.25%; 5%.

Quizplus · Accepted Answer

The nominal GDP growth from 2018 to 2019 can be attributed to both an increase in prices and an increase in aggregate output. For lemonade, the output increased from 200 to 220 glasses with the price per glass remaining the same, indicating a growth in output but no price increase. For cookies, the output remained the same, but the price per cookie increased from $2 to $2.25, indicating a price increase but no growth in output. Calculating the exact percentages requires more information, but the correct answer must acknowledge both an increase in prices and an increase in output, which option H does.

(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies A)1125%; 0