The next questions refer to the following hypothetical economy
In one year, an economy produces 100 units of capital goods, which sell for $30 each, and 200 units of consumer goods, which sell for $10 each. In the second year, 150 units of capital are produced, and sold for $20 each, while 220 units of consumer goods are produced and sold for $20 each. In the third year, 160 units of capital are sold for $30 each, and 200 units of consumer goods are sold for $20 each.
-Nominal GDP in the three years is
A) 300 in year one, 370 in year two, and 360 in year three
B) 2500 in year one, 3700 in year two, and 4400 in year three
C) 6000 in year one, 7500 in year two, and 9000 in year three
D)5000 in year one, 7400 i n year two, and 8800 in year three
E) 40 in year one, 40 in year two, and 50 in year three

Question

Quizplus · Accepted Answer

Nominal GDP can be calculated by multiplying the quantity produced by the price at which the goods are sold. 
In year one, the economy produces $3000 worth of capital goods (100 units x $30 each) and $2000 worth of consumer goods (200 units x $10 each), for a total nominal GDP of $5000. 
In year two, the economy produces $3000 worth of capital goods (150 units x $20 each) and $4400 worth of consumer goods (220 units x $20 each), for a total nominal GDP of $7400. 
In year three, the economy produces $4800 worth of capital goods (160 units x $30 each) and $4000 worth of consumer goods (200 units x $20 each), for a total nominal GDP of $8800. 
Therefore, the correct option is D.

The Next Questions Refer to the Following Hypothetical Economy