Question

The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2008. In 2009, this country's real GDP was

Year	Price of Waffles	Quantity of Waffles	Price of Pancakes	Quantity of Pancakes
2008	$2.00	100	$1.00	100
2009	$2.00	120	$2.00	150
2010	$2.00	150	$3.00	200
2011	$4.00	180	$3.00	220

		$100.
		$390.
		$400.
		$540.

Answer 1

Real GDP is the market value of all good and services produced during the accounting year measured at base year prices.

Mathematically, Real GDP in Year Y = Sum of (price *Quantity) of all good where quantities are of year Y and Price are of base year.

Thus, Real GDP in Year 2009 = Sum of (price *Quantity) of all good where quantities are of year 2009 and Price are of base year(i.e. 2008).

So, Real GDP in Year 2009 = 2*120 + 1*150 = 390

Hence the correct answer is (b) $390.