Question

Computerland is a small country which produces three goods: desktops, laptops, and tablets. The prices and quantities for three consecutive years are as follows. 2012 2013 2014 Price Quantity Price Quantity Price Quantity Desktops 10 20 10 18 12 24 Laptops 10 50 9 40 12 60 Tablets 5 50 5 45 8 55 Suppose 2013 is the base year. What is the percentage growth of real GDP from 2013 to 2014

Answer 1

37.9%

Step-by-step explanation:

Please find attached a clear image of the table used in answering this question

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.

Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.

Real GDP in 2013 = (10 X 18) + (9 x 40) + (5 x 45) = 180 + 360 + 225 = 765

Real GDP in 2014 = (10 X 24) + (9 x 60) + (5 x 55) = 240 + 540 + 275 =1055

Percentage growth rate in real GDP = (1055 / 765 ) - 1 = 0.379 = 37.9%