Answer:
a. If the base year is the year 2009, then real GDP for 2016 equals <u>$7,600</u>. Round answer to nearest penny and the real GDP for 2017 equals <u>$8,640</u>. Round answer to the nearest penny.
b. The annual growth rate of real GDP in 2017 is <u>13.68%</u>. Enter response as a percentage rounded to 2 decimal places.
Explanation:
2009 Statistics 2016 Statistics 2017 Statistics
Quantity Price Quantity Price Quantity Price
Shoes 90 $50.00 100 $60.00 100 $65.00
Hamburgers 75 $2.00 100 $2.00 120 $2.25
Shirts 70 $40.00 60 $35.00 85 $35.00
Cotton 12,000 $0.90 12,000 $0.75 13,000 $0.80
GDP 2009 = (90 x $50) + (75 x $2) + (70 x $40) = $7,450
GDP 2016 = (100 x $60) + (100 x $2) + (60 x $35) = $8,300
GDP 2017 = (100 x $65) + (120 x $2.25) + (85 x $35) = $9,745
real GDP 2016 = (100 x $50) + (100 x $2) + (60 x $40) = $7,600
real GDP 2017 = (100 x $50) + (120 x $2) + (85 x $40) = $8,640
growth rate = (8,640 - 7,600) / 7,600 = 0.1368 or 13.68%
