Question

Scenario 1: Imagine that an economy produces two goods, hot dogs and baseballs. In the year 2000 the economy produces 20 hot dogs and 15 baseballs, and the prices of hot dogs and baseballs were $2 and $5, respectively. In the year 2001 the economy produces 25 hot dogs and 20 baseballs, and the prices of hot dogs and baseballs were $3 and $6, respectively. Based on the information in Scenario 1, nominal GDP in the year 2000 in this economy is: Group of answer choices

Answer 1

$115

Step-by-step explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Nominal GDP is GDP calculated using current year prices

(20 x $2) + (15 x $5) = $115