$$\begin{array} { | c | c | c | c | }
\hline \text { Year } & \text { Units of Output } & \text { Price of Bagel per Unit } & \text { Price Index (Year 1=100) } \
\hline 1 & 10 & \$ 10 & 100 \
\hline 2 & 12 & 20 & 200 \
\hline 3 & 15 & 30 & 300 \
\hline 4 & 20 & 40 & 400 \
\hline
\end{array}$$ The table contains data for a hypothetical single-product economy. Nominal GDP in year 4 is
A) $320.
B) $450.
C) $225.
D) $800.

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 4 is
A) $320.
B) $450.
C) $225.
D) $800.

Quizplus · Accepted Answer

Nominal GDP is calculated by multiplying the units of output by the price per unit for a given year. In year 4, the units of output are 20 and the price per unit is $40. Therefore, Nominal GDP for year 4 is 20 units * $40/unit = $800.

The Table Contains Data for a Hypothetical Single-Product Economy