The table below gives the quantities and prices for 2010 and 2015 for an economy that produces just two goods: sailboats and coconuts. For this economy that produces just sailboats and coconuts, and with 2010 is the base year, nominal GDP was approximately ______ times larger in 2015 than it was in 2010.

Question

The table below gives the quantities and prices for 2010 and 2015 for an economy that produces just two goods: sailboats and coconuts.  For this economy that produces just sailboats and coconuts, and with 2010 is the base year, nominal GDP was approximately ______ times larger in 2015 than it was in 2010.

Quizplus · Accepted Answer

Nominal GDP in 2010 was (10 sailboats × $500) + (2,000 coconuts × $1) = $7,000 and nominal GDP in 2015 was (20 sailboats × $525) + (2,400 coconuts × $2) = $15,300. So the economy was 2.19 times larger ($15,300 / $7,000) in 2015 in nominal dollars.

The Table Below Gives the Quantities and Prices for 2010