Goods 1990 Quantities 1990 Prices 2012 Quantities 2012 Prices

papayas 10 $1.00 20 $0.50

fish 15 $0.60 20 $0.80

skirts 8 $4.00 15 $4.00

Refer to the above data

Assuming that 1990 is the base year, Real GDP in 2012 is:

a. $49

b. $51

c. $86

d. $92.

e. Not possible to calculate without the CPI.

GDP in 1990 is:

a. $92

b. $49

c. $31

d. $86

e. impossible to calculate without the CPI

GDP in 2012 is:

a. $51

b. $86

c. $92

d. $49

e. not possible to calculate without the CPI

Real GDP in 2012 is $92

GDP in 1990 is $51

GDP in 2012 is $86

Explanation:

In this question, we apply the produced goods amount formula which is

= Price * Quantity produced

For Real GDP in 2012, the computation is

= (1990 Papaya price * Quantity produced in 2012) + (1990 fish price * Quantity produced in 2012) + (1990 skirts price * Quantity produced in 2012)

= ($1 * 20) + ($0.60 * 20) + ($4 * $15)

= 20 + 12 + 60

= $92

GDP in 1990 is

= (1990 Papaya price * Quantity produced in 1990) + (1990 fish price * Quantity produced in 1990) + (1990 skirts price * Quantity produced in 1990)

= ($1 * 10) + ($0.60 * 15) + ($4 * 8)

= 10 + 9 + 32

= $51

GDP in 2012 is

= (2012 Papaya price * Quantity produced in 2012) + (2012 fish price * Quantity produced in 2012) + (2012 skirts price * Quantity produced in 2012)

= ($0.50 * 20) + ($0.80 * 20) + ($4 * 15)

= 10 + 16 + 60

= $86