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12 May, 08:41

Goods 1990 Quantities 1990 Prices 2012 Quantities 2012 Prices

papayas 10 $1.00 20 $0.50

fish 15 $0.60 20 $0.80

skirts 8 $4.00 15 $4.00

Refer to the above data

Assuming that 1990 is the base year, Real GDP in 2012 is:

a. $49

b. $51

c. $86

d. $92.

e. Not possible to calculate without the CPI.

GDP in 1990 is:

a. $92

b. $49

c. $31

d. $86

e. impossible to calculate without the CPI

GDP in 2012 is:

a. $51

b. $86

c. $92

d. $49

e. not possible to calculate without the CPI

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Answers (1)
  1. 12 May, 09:46
    0
    Real GDP in 2012 is $92

    GDP in 1990 is $51

    GDP in 2012 is $86

    Explanation:

    In this question, we apply the produced goods amount formula which is

    = Price * Quantity produced

    For Real GDP in 2012, the computation is

    = (1990 Papaya price * Quantity produced in 2012) + (1990 fish price * Quantity produced in 2012) + (1990 skirts price * Quantity produced in 2012)

    = ($1 * 20) + ($0.60 * 20) + ($4 * $15)

    = 20 + 12 + 60

    = $92

    GDP in 1990 is

    = (1990 Papaya price * Quantity produced in 1990) + (1990 fish price * Quantity produced in 1990) + (1990 skirts price * Quantity produced in 1990)

    = ($1 * 10) + ($0.60 * 15) + ($4 * 8)

    = 10 + 9 + 32

    = $51

    GDP in 2012 is

    = (2012 Papaya price * Quantity produced in 2012) + (2012 fish price * Quantity produced in 2012) + (2012 skirts price * Quantity produced in 2012)

    = ($0.50 * 20) + ($0.80 * 20) + ($4 * 15)

    = 10 + 16 + 60

    = $86
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