Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Suppose there is a very small country called Micro-opolis
Suppose there is a very small country called Micro-opolis. It makes only two goods: cell phones and pears. Their prices and quantities are the following:
Price of pears Quantity of pears Price of cell phones Quantity of cell phones
2017 $2 100 $200 100
2018 $2.50 110 $225 110
2019 $3 145 $250 145
If 2017 is the base year, what is the growth in real GDP from 2018 to 2019?
Computation of Growth in real GDP from 2018 to 2019:
Growth in real GDP from 2018 to 2019 = [(Real GDP in year 2019) - (Real GDP in year 2018)*100]/ (Real GDP in year 2018)
Here,
Real GDP in year 2018 = $2 * 110 + $200 * 110 = $220 + $22,000 = $22,220
Real GDP in year 2019 = $2 * 145 + $200 * 145 = $290 + $29,000 = $29,290
Growth in real GDP from 2018 to 2019 = [(29,290-$22,220)*100]/$22,220 = $7,070*100/$22,220 = 31.82%
