This economy only produces two goods, milk and cookies. The base year is given as 2013. Using table: Milk and Cookies, find the real GDP of 2014. **Table: Milk and Cookies**| | 2013 Output | 2013 Prices | 2014 Output | 2014 Prices ||------------|-------------|-------------|-------------|-------------|| Milk | 107 | 1 | 141 | 3 || Cookies | 215 | 4 | 242 | 6 |This economy only produces two goods: milk and cookies. The base year is given as 2013. Using the table provided for Milk and Cookies, find the real GDP of 2014.**Explanation:**To calculate the real GDP of 2014 using the base year prices of 2013, use the formula:Real GDP = (Output in 2014 * Prices in 2013)For Milk:Real GDP (Milk) = 141 * 1 = 141For Cookies:Real GDP (Cookies) = 242 * 4 = 968Total Real GDP for 2014 = 141 (Milk) + 968 (Cookies) = 1109Therefore, the real GDP of 2014 at 2013 prices is 1109.

Real GDP of a year is calculated by using CPI of a particular and the nominal GD in that particular…

Table: Milk and Cookies 2013 2014 2013 Prices 2014 Prices Output Output Milk 107 141 3 Cookies 215 14 242 This economy only produces two goods, milk and cookies. The base year is given as 2013. Using Table: Milk and Cookies, find the real GDP of 2014.

Table: Milk and Cookies 2013 2014 2013 Prices 2014 Prices Output Output Milk 107 141 3 Cookies 215 14 242 This economy only produces two goods, milk and cookies. The base year is given as 2013. Using Table: Milk and Cookies, find the real GDP of 2014.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

This economy only produces two goods, milk and cookies. The base year is given as 2013. Using table: Milk and Cookies, find the real GDP of 2014.

**Table: Milk and Cookies**

| | 2013 Output | 2013 Prices | 2014 Output | 2014 Prices |
|------------|-------------|-------------|-------------|-------------|
| Milk | 107 | 1 | 141 | 3 |
| Cookies | 215 | 4 | 242 | 6 |

This economy only produces two goods: milk and cookies. The base year is given as 2013. Using the table provided for Milk and Cookies, find the real GDP of 2014.

**Explanation:**

To calculate the real GDP of 2014 using the base year prices of 2013, use the formula:

Real GDP = (Output in 2014 * Prices in 2013)

For Milk:
Real GDP (Milk) = 141 * 1 = 141

For Cookies:
Real GDP (Cookies) = 242 * 4 = 968

Total Real GDP for 2014 = 141 (Milk) + 968 (Cookies) = 1109

Therefore, the real GDP of 2014 at 2013 prices is 1109.

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

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