A simple economy produces two goods,

Apple Pies

and

Technical Manuals.

Price and quantity data are as follows:

Production and Prices in Year 1 (Base year)

Product

Quantity

Price Per Unit

Apple PiesApple Pies

100

$3.00

Technical ManualsTechnical Manuals

550

$45.00

Production and Prices in Year 2

Product

Quantity

Price Per Unit

Apple PiesApple Pies

125.00

$4.50

Technical Manuals

825.00

$90.00

In Year 2, nominal GDP is equal to:

$,

and real GDP is

$

(enter both responses rounded to the nearest penny ).

Question

19 November, 04:36

+3

Answers (1)

Know the Answer?

Kaia · Answer 1

In year 2, nominal GDP is equal to: 33750

125 * $4.5 * 60 = 562.5

And real GDP is: 49,875

125 * 3 + 825 * 60 = 49,875