Consider the following data for Tyrovia, a country that produces only two products: guns and butter. Year Guns Produced Price of Guns Butter Produced Price of Butter 2009 80 $5 40 $4 2018 90 6 60 10 Real GDP for Tyrovia for 2018 using 2009 as the base year equals A. $1,140. B. $560. C. $880. D. $690.

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fichoh fichoh · Answer 1 · 2020-04-05T04:09:48+02:00

Answer:D. $690

Explanation:

GIVEN THE FOLLOWING :

YEAR 2009

Guns produced = 80

price of gun =$5

Butter produced = 40

price of butter = $4

Year 2018

Guns produced = 90

Price of guns = $6

Butter produced = 60

Price of butter = $10

REAL GDP FOR TYROVIA FOR 2018 USING 2009 AS BASE YEAR IS GIVEN AS:

(GUNS PRODUCED IN 2018 × PRICE OF GUNS IN 2009) + (BUTTER PRODUCED IN 2018 × PRICE OF BUTTER ON 2009)

REAL GDP = ( 90 × $5) + (60 × $4)

REAL GDP = $450 + $240 = $690

heavenandholiness heavenandholiness · Answer 2 · 2020-04-05T04:32:50+02:00

Answer:

C. $880.

Explanation:

2009 80 $5 40 $4

2018 90 $6 60 $10

Real GDP for Tyrovia for 2018 using 2009 as the base year equals:

Nominal GDP for 2018 = (90 x $6) + (60 x $10) = $1,140

CPI = 90/80 = 1.125 for guns and 60/40 = 1.5 for butter

Real GDP = (90 x 6) / 1.125 + (60 x 10) / 1.5 = 480 + 400 = $880

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