Question

Suppose that an economy produces only two types of goods. At a given year, it makes 70,973 units of good A which sells at $9 a unit and 64,928 units of good B which sells at $7 per unit. What is the nominal GDP of this economy for that year?

Answer 1

Answer:$1,093,253

Explanation:

GDP is the sum of all final goods and services produced in an economy in a given year.

Nominal GDP is calculated using current year prices.

Nominal GDP = (70,973 × $9)+(64,928 × $7) =$454,496 + 638,757 =$1,093,253