Question

(a) calculate the nominal gross domestic product (gdp ) for year 2. show your work. (b) using year 1 as the base year, calculate real gdp for year 2. show your work.

Answer 1

The economy produces three goods: computers, t-shirts, and sunglasses:

Calculate the nominal GDP in Britannica for year 1 is $10,030.

Calculate the real GDP in Britannica for year 1 using year 2 as the base year is $10,030.

Calculate the real GDP in Britannica for year 2 using year 1 as the base year $11,945

For calculating nominal GDP ,

= [$900 x 10] + [$10 x 100] + [$15 x 2]

= 9000 + 1000 + 30

= $10030

Calculate the real GDP in Britannica for year 1 using year 2 as the base year,

= [$900 x 10] + [$10 x 100] + [$15 x 2]

= 9000 + 1000 + 30

= $10030

Calculate the real GDP in Britannica for year 2 using year 1 as the base year,

= [$900 x 12] + [$10 x 110] + [$15 x 3]

= 10800 + 1100 + 45

= $11,945

Therefore, real GDP in Britannica for year 2 using year 1 as the base year.

Step-by-step explanation: