Assume an economy produces only footballs and baseballs and the base year is 2005. $\begin{array}{lllll}
& {\text { Quantities Produced }} && {\text { Prices }} \
& 2005 & 2006 & 2005 & 2006 \
\text { Footballs } & 200 & 300 & \$ 20 & \$ 25 \
\text { Baseballs } & 500 & 600 & \$ 10 & \$ 15
\end{array}$

Given the data in the table above, what is the value of real GDP in 2006?

Question

Assume an economy produces only footballs and baseballs and the base year is 2005. $\begin{array}{lllll} 
& {\text { Quantities Produced }} && {\text { Prices }} \
 & 2005 & 2006 & 2005 & 2006 \
\text { Footballs } & 200 & 300 & \$ 20 & \$ 25 \
\text { Baseballs } & 500 & 600 & \$ 10 & \$ 15
\end{array}$

Given the data in the table above, what is the value of real GDP in 2006?

Quizplus · Accepted Answer

Real GDP in 2006 is calculated using the quantities from 2006 and the prices from the base year 2005. For footballs: 300 * $20 = $6,000. For baseballs: 600 * $10 = $6,000. Total real GDP = $6,000 + $6,000 = $12,000.

Assume an Economy Produces Only Footballs and Baseballs and the Base