Question

Consider the following data that gives the quantity produced and unit price for three different goods across two different years. Assume that the base year is 2015.Good 2015 Price 2015 Quantity 2016 Price 2016 QuantityA $2 250 $3 200B $3 300 $ 2 400C $4 400 $5 500What was the real gross domestic product (GDP) in 2016?A. $3,000

B. $3,350
C. $3,600
D. $3,900
E. $8,550

Answer 1

C. $3,600

Step-by-step explanation:

The value of gross domestic product after adjusting the inflation effect in the valuation of the product.

Calculate the real GDP as follow

Real GDP of 2016 = ( $2 x 200 ) + ( $3 x 400 ) + ( $4 x 500 )

Real GDP of 2016 = 400 + 1200 + 2000

Real GDP of 2016 = $3600

Hence, real gross domestic product (GDP) in 2016 is $3,600