An economy produces only cell phones. In 2015, the economy manufactured 275 cell phones, and each cell phone sold for $200. In 2016, the economy manufactured 280 cell phones, but the price of each cell phone fell to $180.
-Refer to the scenario above. What is the nominal GDP of the economy in 2015?

Question

Quizplus · Accepted Answer

Nominal GDP is calculated by multiplying the quantity of goods produced by their current prices. In 2015, the economy produced 275 cell phones, each at $200, so the nominal GDP is 275 * $200 = $55,000.

An Economy Produces Only Cell Phones