The base year is 2019. A country only produces iPhones. The price of an iPhone in 2017 was $50. The price of an iPhone was $30 in 2019. The quantity of iPhones produced in 2017 was 10,000 units and in 2019 was 20,000 units. Nominal GDP in 2019 equals
A) $1,000,000.
B) $600,000.
C) $500,000.
D) $200,000.
E) an amount that cannot be determined without information about real GDP in 2014.

Question

Quizplus · Accepted Answer

Nominal GDP is calculated by multiplying the current year's output by the current year's prices. In 2019, 20,000 iPhones were produced at a price of $30 each, so the nominal GDP is 20,000 * $30 = $600,000.

The Base Year Is 2019