Scenario: A country produces only one good. It produced 5,000 units of the good during Year 1 and 6,000 units of the good in Year 2. The price of each unit of the good in Year 1 was $280 and it was $320 in Year 2. Suppose Year 1 is taken as the base year for the calculation of GDP.
-Refer to the scenario above.The real GDP of the country in Year 2 was ________.
A) $1,680,000
B) $240,000
C) $32,000,000
D) $1,420,000

Question

Quizplus · Accepted Answer

Real GDP in Year 2 is calculated using the prices from the base year (Year 1). Therefore, Real GDP in Year 2 = 6,000 units * $280 = $1,680,000.

Scenario: a Country Produces Only One Good