Answer to Question #65119 in Macroeconomics for Christina
a. Calculate nominal GDP in the two provinces and discuss the results.
b. Imagine a method of calculating GDP that would allow a more accurate comparison between the economic performances of the two provinces. Explain.
b. The used method of calculation of GDP is based on accounting of prices of the product. Alberta is characterized with a lower price for wheat. It leads to lower nominal GDP. However, it does not mean lower level of economic development. More optimal way to compare economic development of both provinces is to calculate real GDP ir GDP-deflator.
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