Question

Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per-unit prices of these three goods are A = $2, B = $3, and C = $1. Nominal GDP in the current year isa. $110.
b. $115.
c. $45.
d. $90.

Answer 1

Answer:

Nominal GDP = $ 115

Explanation:

Nominal Income is value of all goods & services produced by an economy during a given period of time, evaluated at constant prices.

Given : 3 goods A, B , C and their respective prices & quantities ;

Nominal GDP = Σ [ (Price of all goods) x (quantity of all goods) ]

[(2) x (10)] + [(3) x (30)] + [(5) x (1)]

20 + 90 + 5

= $ 115