<p>An economy produces three goods: cars, computers, and oranges. Quantities and

Question

<p>An economy produces three goods: cars, computers, and oranges. Quantities and prices per</p>
<p>units for year 2010 and 2011 are as follows:</p>
<p>2010 &#160;</p>
<p>Cars: Quantity, 10 Price, $2,000&#160;</p>
<p>Computers: Quantity, 4 Price, $1,000</p>
<p>Oranges: Quantity, 1,000 Price, $1</p>
<p>2011</p>
<p>Cars: Quantity, 12 Price, $3,000</p>
<p>Computers: Quantity, 6 Price, $500</p>
<p>Oranges: Quantity, 1,000 Price, $1</p>
<p>What is nominal GDP in 2010 and in 2011? By what percentage does nominal GDP change from 2010 to 2011?</p>

Explanation / Answer

The copy/paste is a bit confusing. I don't know what &#160 is referring to. So, I will ignore that. To find the nominal GDP, we just take the linear combination of prices and quantities. Here, we are assuming no government spending, investment, or net-exports. 2010: 10*2000+4*1000+100*1=$24,100 2011: 12*3000+6*500+1000*1=$40,000 To calculate percent change: (40000-24100)/24100 = 66%

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