Question

Goods	1990 Quantities	1990 Prices	2012 Quantities	2012 Prices
Bananas	10	$1.00	20	$0.50
Fish	15	$0.60	20	$0.80
Shirts	8	$4.00	15	$4.00

Refer to Table 1. GDP in 2012 is

Select one:

A. $49.

B. $86.

C. $92.

D. $51.

Answer 1

Answer- Correct option is 'D'

To calculate real GDP in a certain year, multiply the quantities of goods produced in that year by the price for those goods in the base year.

GDP      =     Quantity of current year * Price of the base year

              1) 10 * 1.0020 = 10.02

               2) 15 * 0.6020 = 9.03

              3)    8 * 4.0015 = 32.01

10.02 + 9.03 + 32.01 = 51.06

GDP is $ 51