2006200620112011Product Quantity PriceQuantity PriceMovies20$6.0030$7.00Burgers100$2.0090$2.50Bikes3$1,000.006$1,100.00Use the information to calculate(a)Nominal GDP of 2011 and(b)Real GDP in the year 2011 (Assume 2006 as the base year).(c)ls it ever possible for Real GDP to be higher than Nominal GDP of any year? when? ( 1-2 LINESONLY)

Answered: 2006 2006 2011 2011 Product Quantity…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Measuring A Nation's Income

Section: Chapter Questions

Problem 4PA

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2006
2006
2011
2011
Product Quantity Price
Quantity Price
Movies
20
$6.00
30
$7.00
Burgers
100
$2.00
90
$2.50
Bikes
3
$1,000.00
6
$1,100.00
Use the information to calculate
(a)Nominal GDP of 2011 and
(b)Real GDP in the year 2011 (Assume 2006 as the base year).
(c)ls it ever possible for Real GDP to be higher than Nominal GDP of any year? when? ( 1-2 LINES
ONLY)

Expert Solution

Step 1

(a) Nominal GDP is the current value of all goods and services (GDP) produced in an economy calculated at a given period of time.

Nominal GDP is calculated in the prices of the current year.

Base Year=2006

Nominal GDP in 2011=Price of Movie in 2011*Quantity of Movie in 2011+Price of Burger in 2011*Quantity of Burger in 2011+Price of Bikes in 2011*Quantity of Bikes in 2011

Nominal GDP in 2011=7*30+2.5*90+1100*6

Nominal GDP in 2011=7035

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