Suppose the economy of Econoworld produces only two goods, kayaks and birdseed.In 2017, 20 kayaks are produced and sold for $1,000 each and 10 bags of birdseed are produced and sold for $30 each.The value of nominal GDP in 2017 is

Question

Quizplus · Accepted Answer

Nominal GDP is calculated by adding up the total dollar value of all goods and services produced in an economy in a given year. Therefore, we need to calculate the total dollar value of the kayaks and birdseed produced and sold in 2017:

Total value of kayaks = 20 kayaks x $1,000 per kayak = $20,000
Total value of birdseed = 10 bags x $30 per bag = $300

Nominal GDP = Total value of kayaks + Total value of birdseed
Nominal GDP = $20,000 + $300
Nominal GDP = $20,300

Therefore, the value of nominal GDP in 2017 is $20,300, which is option D.

Suppose the Economy of Econoworld Produces Only Two Goods, Kayaks