Question

O. QUESTIONS Table: Lemonade and Cookies Lemonade Cookies 2016 2016 Price 2017 2017 Price Output Output 200 glasses $1 per glass 220 glasses 51 per glass 100 cookies $ 2 per 100 cookies $2.25 per cookie cookie Look at the table L oaded Cookies Asume that a conomy produces cely lemonade and cookies. What is the growth rate of nominal GDP from 2016 to 2017 2016 is the base yrar) O-11 OS Os QUESTIONS

Answer 1

The nominal GDP is the value of GDP at the current year's prices. The GDP for 2016 and 2017 is calculated in the table below

	2016		2017
	Q	P	Q	P
Lemonade	200	1	220	1
Cookies	100	2	100	2.25
Nominal GDP		400		445

Therefore, the growth rate of nominal GDP is

$g_y=\frac{445-400}{400}\times 100=11.25\%$

Therefore, the correct option is: 11.25%