Question

The fictional small country of Dansbert has had a robust GDP the last few years. Dansbert produces just two products: TVs and Computers. The following chart shows product quantities and prices from 2016 to 2018. With 2016 as the base year calculate the real GDP using 2018 prices. What is the real yearly growth in 2017 &2018 TVs Computers Year 2016 (base year)1 millionS20 Year 2017 Year 2018 2 million 3 million$40 3 million 5 million$706 million S40 S65 S80 80% for 2017:89% for 2018

Please got into great detail on how to solve. Can get a formula on how to do problems like this.

Answer 1

Base year = 2016 Real EDP = units of output times price per unit of base year rear GDP of 2016 (base year) = (1 million times $20) + (2 million times $40) = $100 million real GDP of 2017 = (3 million times $20) + (3 million times $40) = $180 million real GDP of 2018 = (5 million times $20) + (6 million times $40) = $340 million. Growth in real GDP = real GDP in current yr. - real GDP in previous yr /real GDP in previous year times 100 real GDP growth between 2016 - 2017 = $180 million - $100 million/$100 million times 100 = $80 million/$ 100 million/$100 million = $80 million/$100 million times 100 = 80% real GDP growth between 2017 - 2018 = $340 million - $180 million/$180 million times 100 =$160 million/$180 million times 100 = 89%