Table 4.11 Consider the above data for Tyrovia, a country that produces only two products: guns and butter.
-Refer to Table 4.11.Real GDP for Tyrovia for 2018 using 2012 as the base year equals

Question

Table 4.11  Consider the above data for Tyrovia, a country that produces only two products: guns and butter.
-Refer to Table 4.11.Real GDP for Tyrovia for 2018 using 2012 as the base year equals

Quizplus · Accepted Answer

To calculate the real GDP using the base year 2012, we need to use the formula:
Real GDP = (Nominal GDP / GDP deflator) x 100

In 2012, the nominal GDP is $500 ($250 guns + $250 butter) and the GDP deflator is 100.

In 2018, the nominal GDP is $920 ($460 guns + $460 butter) and the GDP deflator is 133.33.

Therefore, Real GDP for Tyrovia in 2018 using 2012 as base year can be calculated as follows:

Real GDP = ($920 / 133.33) x 100 = $690

Hence, the correct answer is C.

Table 411 Consider the Above Data for Tyrovia, a Country