Answer to Question #188456 in Macroeconomics for Risper

Question

2019, 200 KGs of oranges are produced at Rs.40/kg, 500 KGs of apples are produced at 120/kg, and 200 Glasses of orange juice are produced at Rs.150/glass.

In 2020, 220 KGs of oranges are produced at Rs.50/kg, 450 KGs of apples are produced at 140/kg, and 230 glasses of orange juice are produced at Rs.135/glass.

 

Assuming 2019 is the base year; calculate the real GDP in 2019 

Answer 1

It is note that in the base year, real GDP is equal to nominal GDP

So, we have to first calculate nominal GDP of 2019 assuming 2019 is the base year;

Nominal GDP = Sum of Price$\times$ Quantity of each good

$= 200\times 40 + 500\times 120 + 200\times 150$

$= 8000 + 60000 + 30000$

= $98,000

As 2019 is the base year, so real GDP = nominal GDP = $98,000