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1)The country described in the table below produces and consumes only three goods: energy drinks, pizza, and t-shirts
1)The country described in the table below produces and consumes only three goods: energy drinks, pizza, and t-shirts. The quantity produced and price of each good in 2016 and 2017 are provided. Good Quantity t-shirts 150 Energy drinks(cans) 600 Pizza (slices) 1,200 2016 Price $22 $1.50 $2.25 Quantity 170 600 1,100 2017 Price $20 $2 $3 Refer to the above table. What is nominal GDP for 2016? A) $5,850 B) $6,400 C) $6,900 D) $7,900
2)The country described in the table below produces and consumes only three goods: energy drinks, pizza, and t-shirts. The quantity produced and price of each good in 2016 and 2017 are provided. 2016 Price $22 $1.50 $2.25 Good Quantity t-shirts 150 Energy drinks(cans) 600 Pizza (slices) 1,200 Quantity 170 2017 Price $20 $2 $3 600 1,100 Refer to the above table. What is nominal GDP for 2017? A) $6,900 B) $7,400 C) $7,700 D) $7,900
Expert Solution
1)Option C is the Correct Answer.= $6900
Nominal Gdp is simply equal to the sum of the current year price* current year quantity of all the goods.
Nominal Gdp for 2016 = ($22 * 150) + ($1.5*600) + ($2.25 * 1200)
= 3300 + 900 + 2700 = $ 6900
2)
Answer: D) $7900
Nominal GDP is the total value of goods and services produced in a year.
This is the sum of products of prices and respective quantities of goods in a year.
So, nominal GDP in 2017 =
$20*170 + $2*600+ $3*1100 = $7900
So, the correct answer is D.
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