Question

Q.2.(ii) Suppose a country
produces bread only. In the
year 2018-19 it had produced
1,000 units of bread, price was
10 per bread. In 2019-20, it
produced 1,100 units of bread
at price of 12 per bread. In
2019-20, the nominal and real
GDP are:​

Answer 1

Given:

Bread units in 2018-19 = 1000 units

Price = 10 per bread

Bread units in 2019-20 = 1100 units

Price = 12 per bread

To Find:

The nominal and real  GDP

Solution:

In the year 2018-19, the country produced 1000 units of bread, at a price of Rs 10 per bread. Thus,

GDP at current price was = 1000 x 10 = 10,000

In 2019-20 the same country produced 1100 units of bread at a price Rs 12 per bread. Therefore,

Nominal GDP in 2019-20 was = 1100 x 12 = 13,200

Now, Real GDP in 2019-20 will be calculated at the price of the year 2018-19 which will be called the base year.

Thus,

It will be = 1100 ×  10

11,000.

Answer: The nominal GDP is Rs, 13,200 and real is Rs. 11,000