Question & Answer: The following table provides data on two goods produced in a country during 2015 and 2016. For simplicity, ass…..

Please answer questions 2 and 3

QUESTION 2 The following table provides data on two goods produced in a country during 2015 and 2016. Year Quantity Price T-shirts Milk (1/4 gallon 1,000 3,000 T-shirtsMilk (1/4 gallon) 2015 2016 2,000 1,000 $12 $15 $4 $4.5 For simplicity, assume that this country does not produce any other goods or services. Given the information in the table above, if 2016 is the base year, nominal GDP in 2015 is Quiz 1-page 1 QUESTION 3 Based on the information in the previous question, real GDP in 2015 is_

The following table provides data on two goods produced in a country during 2015 and 2016. For simplicity, assume that this country does not produce any other goods or services. Given the information in the table above, if 2016 is the base year, nominal GDP in 2015 is _____ Based on the information in the previous question, real GDP in 2015 is _____

Expert Answer

2. Nominal GDP is gross domestic product (GDP) evaluated at current market prices,GDP being the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.

Nominal GDP in 2015 = 1000x$12+ 2000x$4 = 20000

3.If 2016 were chosen as the base year, then real GDP for 2015 is calculated by taking the quantities of all goods and services purchased in 2015 and multiplying them by their 2016 prices.

Real GDP in 2015 = 1000X$15 + 2000X$4.5 =24000

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