Question

Consider an economy that produces only two goods: DVDs and DVD players. Last year, 10 DVDs were sold at $20 each and 5 DVD players were sold at $100 each, while this year 15 DVDs were sold at $10 each and 10 DVD players were sold at $50 each. Nominal GDP this year is:
A) $100.B) $700.C) $1,300.D) $300.

Answer 1

Answer:

$650

Explanation:

Gross domestic product is the sum of all the goods and services produced in an economy within a given period which is usually a year.

Nominal GDP = current year prices × number of goods produced.

Nominal GDP = (current price of dvd × quantity of DVD) + (current Price of DVD player × quantity of DVD player)

Nominal GDP =($10 × 15) + ($50 × 10) = $650