Assume that apples cost $0.50 in 2012 and $1 in 2019, whereas oranges cost $1 in 2012 and $1.50 in 2019. If 4 apples were produced in 2012 and 5 in 2019, whereas 3 oranges were produced in 2012 and 4 in 2019, then real GDP (in 2012 prices) in 2019 was:
A)$5.
B)$6.50.
C)$9.50.
D)$11.

Question

Quizplus · Accepted Answer

Real GDP in 2019 using 2012 prices is calculated by multiplying the 2019 quantities by the 2012 prices: (5 apples * $0.50) + (4 oranges * $1) = $2.50 + $4 = $6.50.

Assume That Apples Cost $0