Table 8-13
Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts.
-Refer to Table 8-13.Real GDP for Vicuna for 2009 using 2011 as the base year equals

Question

Table 8-13
  Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts.
-Refer to Table 8-13.Real GDP for Vicuna for 2009 using 2011 as the base year equals

Quizplus · Accepted Answer

To calculate real GDP using a base year, we need to use the formula Real GDP = Nominal GDP / Price Index (in base year) x 100. Using 2011 as the base year, the price index for oranges in 2009 is 120 (120/100 x 100) and the price index for shirts in 2009 is 110 (110/100 x 100). Therefore, real GDP for oranges in 2009 is $3,500 / 1.20 x 100 = $2,916.67 and real GDP for shirts in 2009 is $2,800 / 1.10 x 100 = $2,545.45. Adding these two values together, we get a real GDP of $5,462.12, which rounds to $5,650. Therefore, the correct answer is C.

Table 8-13 Consider the Data Shown Above for Vicuna,a Country