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Calculating Real GDP

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Country A produces two goods, elephants and saddles. In the year 2006, the 30 units of elephants produced sold for $3,000 per unit and the 50 units of saddles produced sold for $300 per unit. In 2007, the 40 units of elephants produced sold for $4,000 per unit, and the 60 units of saddles produced sold for $250 per unit. Real GDP for 2007, assuming that 2006 is the base year is:

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The solution describes the steps to calculate Real GDP in the given case.

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In this case, Real GDP in 2007 assuming 2006 as base year= Market Value ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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