Reference no: EM133082861

Table 1 provides hypothetical price and quantities of economic transactions in a country for 2009 and 2010. Year 2009=100 suggests 2009 is the base year. Carefully review the information in the table and the assumptions below. Then solve the problems below.

Table 1: Price and quantities of items produced in 2009 and 2010

(Year 2009=100) Year 2009 is base year

Items	Price in 2009	Quantity in 2009	Price in 2010	Quantity in 2010
Computers	$500	100	$450	115
DVD drives	$50	50	$45	60
Milk	$3	130 liters	$3.25	150 liters
Pizza	$10	20	$12	24

Assumptions:

• The year 2009 (Year 2009=100) is the base year.
• All items in the table are domestically produced.
• All milk and DVDs are for personal consumption.

Problems:

1. Refer to table 1. Calculate the nominal GDP for 2010. 
2. Refer to table 1. Calculate real GDP for 2010. 
3. Calculate the nominal GDP for 2009. 
4. Refer to table 1. Calculate real GDP for 2009.

Items	Nominal GDP in 2009 2009	Real GDP in 2009	Nominal GDP in 2010	Real GDP in 2010
Computers
DVD drives
Milk
Pizza