A south pacific island produces only coconuts. In 2018, the price of a coconut is $1 and the quantity produced is 200. In 2019, the price of a coconut is $1.50 and the quantity produced is 250. 2018 is the base year. Real GDP in 2019 is ________.
A) $1.50
B) $200
C) $375
D) $350
E) $250

Question

Quizplus · Accepted Answer

Real GDP in 2019 is calculated using the base year prices. Thus, Real GDP = 2019 quantity * 2018 price = 250 coconuts * $1 = $250.

A South Pacific Island Produces Only Coconuts