Use the following information to answer the next several questions:
Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2011, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2012, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively.
-Based on the information in Scenario 1, nominal GDP grew by about ________ percent from 2011 to 2012.

Question

Quizplus · Accepted Answer

We can calculate nominal GDP for 2011 and 2012 as follows:
Nominal GDP in 2011 = (70 x $5) + (40 x $12) = $350 + $480 = $830
Nominal GDP in 2012 = (85 x $7) + (50 x $15) = $595 + $750 = $1,345
The percentage increase in nominal GDP from 2011 to 2012 is:
((($1,345 - $830) / $830) x 100) = 62.65 ≈ 62%  Therefore, the best choice is C.

Use the Following Information to Answer the Next Several Questions