For the following questions, suppose an economy produces only ...

[chads108]

For the following questions, suppose an economy produces only pens and pencils, and that the quantity and price data is given by this table
 
  pens pencils
  Year 1 quantity 15 10
  Year 1 price 12 12
  Year 2 quantity 17 12
  Year 2 price 14 15
 
  What is the real GDP in year 2 using base year 1?
  A) 418
  B) 300.
  C) 360.
  D) 338.

Question 2

According to rational expectations, expectations will only change in the event that ________.
 
  A) wealth changes
  B) current income changes
  C) permanent income changes
  D) unanticipated new information arises

[recede]

Answer to Question 1

D

Answer to Question 2

D