The table shows the quantities produced and prices in 2015 and 2016 for an islan
ID: 1107769 • Letter: T
Question
The table shows the quantities produced and prices in 2015 and 2016 for an island economy which produces only bananas and coconuts The base year is 2016. Calculate real GDP in 2015 and 2016 using the chained-dollar method. In terms of what dollars is each of these two real GDPs measured? n 2015 Price $8a bunch $10 a bag Quantity Item Bananas Coconuts 96 bunches 58 bags hReal GDP in 2016 using the chained-dollar method is In 2016 Item Bananas Coconuts Price Quantity 111 bunches $15a bunch Real GDP in 2015 using the chained-dollar method is 65 bags $7 a bag Answer with a whole number. Real GDP in 2015 and real GDP in 2016 are measured in | | dollarsExplanation / Answer
Answer 1 - A hypothetical economy produces bananas and coconuts. The table has given information about production and price in 2015 and 2016 in the island economy. The table shows data regarding real GDP in 2015 in 2016 prices-
Now real GDP in 2016-
The real GDP in 2015 is $1846
The real GDP in 206 is $2120
Base year was 2016, thus output in both year is measured on 2016 price. Price of bananas $15 a bunch and price of coconut is $7 a bag. Prices are measured in Dollars.
Answer 2 - The hypothetical economy is shows quantities produced in 2015 and 2016 in the given table. The base year is 2016. I have given a table below which shows nominal GDP and real GDP in particular years.
GDP in 2015-
GDP in 2016-
We can see nominal GDP was $1507 in 2015 and became $1939 in 2016. Nominal GDP increased by $432 from 2015 to 2016
Real GDP was $1778 in 2015 and became $1939 in 2016. Real GDP increased by $161 from 2015 to 2016.
The growth rate of nominal GDP in 2016= (432/1507)*100
The growth rate of nominal GDP in 2016 = 28.67%
The growth rate of real GDP in 2016 = (161/1778)* 100
The growth rate of real GDP in 2016 = 9.06%
Item Quantity Price (in 2016) Output on (2016 price) Bananas 96 bunches $15 a bunch $1440 Coconuts 58 bags $7 a bag $406 Real GDP in 2015 $1846Related Questions
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