$$\begin{array} { | c | c | c | c | }
\hline \text { Year } & \text { Units of Output } & \text { Price of Bagel per Unit } & \text { Price Index (Year 1=100) } \
\hline 1 & 10 & \$ 10 & 100 \
\hline 2 & 12 & 20 & 200 \
\hline 3 & 15 & 30 & 300 \
\hline 4 & 20 & 40 & 400 \
\hline
\end{array}$$ The table contains data for a hypothetical single-product economy. Nominal GDP in year 3 is
A) $100.
B) $450.
C) $225.
D) $150.

Question

$$\begin{array} { | c | c | c | c | } 
\hline \text { Year } & \text { Units of Output } & \text { Price of Bagel per Unit } & \text { Price Index (Year 1=100) } \
\hline 1 & 10 & \$ 10 & 100 \
\hline 2 & 12 & 20 & 200 \
\hline 3 & 15 & 30 & 300 \
\hline 4 & 20 & 40 & 400 \
\hline
\end{array}$$ The table contains data for a hypothetical single-product economy. Nominal GDP in year 3 is
A) $100.
B) $450.
C) $225.
D) $150.

Quizplus · Accepted Answer

To calculate nominal GDP, we need to multiply the quantity of each good or service produced by its current market price and then add up the total value. Using this formula, we can calculate nominal GDP for year 3 as follows: 
Nominal GDP = (100 units of output of Goods A x $2 per unit) + (50 units of output of Good B x $5 per unit) 
Nominal GDP = $200 + $250 
Nominal GDP = $450

The Table Contains Data for a Hypothetical Single-Product Economy