Consider an economy that produces only two goods: mandolins…
Consider an economy that produces only two goods: mandolins and fiddles. In 2010, 50 mandolins and 25 fiddles were produced. In 2011, 100 mandolins and 50 fiddles were produced. In 2012, 150 mandolins and 75 fiddles were produced. The price of a mandolin was $300 in 2010, $400 in 2011, and $600 in 2012. The price of a fiddle was $200 in 2010, $250 in 2011, and $300 in 2012. Real GDP for 2012 (using 2011 as the base year) is