550 510000 Solution Period 1 Base Year Period 2 Quantity Pri

550 510000

Solution

Period 1 (Base Year) Period 2 Quantity Price Cost (Q*P) Quantity Price Cost (Q*P) Cost at Base Year Price Bread 120 1.5 180 150 2.25 337.5 150*1.5=225 Technical Manuals 550 50 27500 825 100 82500 825*50 = 41250 27680 82837.5 41475 Nominal GDP of 2nd Period = Unit of output x Price per unit Period 2 Quantity Price Cost (Q*P) Bread 150 2.25 337.5 Technical Manuals 825 100 82500 Nominal GDP 82837.5 Real GDP of 2nd Period = Unit of Output x Price per unit of BASE YEAR Period 2 Quantity Price Cost (Q*P) 150 1.5 225 825 50 41250 REAL GDP 41475