A south sea island produces only coconuts. In 2012, the price of a coconut is $1 and the quantity produced is 200. In 2013, the price of a coconut is $1.50 and the quantity produced is 250. 2012 is the base year. Real GDP in 2013 is _{--------------------}. A)$200 B)$1.50 C)$375 D)$350 E)$250

Question

Quizplus · Accepted Answer

Real GDP in 2013 is calculated using the base year prices. Since the base year is 2012, the price of a coconut is $1. Therefore, Real GDP in 2013 = 250 coconuts * $1 = $250.

A South Sea Island Produces Only Coconuts