Table 8-1

-Refer to Table 8-1.Suppose that a simple economy produces only four goods and services: sweatshirts,dental examinations,coffee drinks,and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table,nominal GDP for this simple economy equals
A)3,090 units.
B)$7,250.
C)$8,750.
D)$9,750.

Question

Table 8-1
 
-Refer to Table 8-1.Suppose that a simple economy produces only four goods and services: sweatshirts,dental examinations,coffee drinks,and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table,nominal GDP for this simple economy equals
A)3,090 units. 
B)$7,250. 
C)$8,750. 
D)$9,750.

Quizplus · Accepted Answer

Nominal GDP is calculated by summing the total market value of all final goods and services produced in an economy. Since coffee beans are intermediate goods used to produce coffee drinks, they are not included in GDP. Therefore, the nominal GDP is the sum of the market values of sweatshirts, dental examinations, and coffee drinks.

Table 8-1 -Refer to Table 8-1.Suppose That a Simple Economy Produces Only