Use the table to answer the question.

Question

2007 2008
Price ($) Quantity Price ($) Quantity
Video Games 60 100 60 200
Movies 15 20 12 50
The table above gives the prices and quantities for a fictional country that only produces video games and movies. What is the growth rate of Nominal GDP from 2007 to 2008?

(1 point)
Responses

200%
200 percent

12,600
12,600

100%
100 percent

6,300
6,300

Answer 1

To calculate the growth rate of Nominal GDP from 2007 to 2008, we first need to calculate the Nominal GDP for each year.

Nominal GDP is calculated by multiplying the price by the quantity of each item and then summing these amounts.

For 2007:

• Video Games: \(60 \text{ (price)} \times 100 \text{ (quantity)} = 6,000\)
• Movies: \(15 \text{ (price)} \times 20 \text{ (quantity)} = 300\)

Total Nominal GDP for 2007: \[ 6,000 + 300 = 6,300 \]

For 2008:

• Video Games: \(60 \text{ (price)} \times 200 \text{ (quantity)} = 12,000\)
• Movies: \(12 \text{ (price)} \times 50 \text{ (quantity)} = 600\)

Total Nominal GDP for 2008: \[ 12,000 + 600 = 12,600 \]

Now we can calculate the growth rate of Nominal GDP from 2007 to 2008.

Growth Rate Formula: \[ \text{Growth Rate} = \left(\frac{\text{GDP}{2008} - \text{GDP}{2007}}{\text{GDP}_{2007}}\right) \times 100 \]

Substituting in the values we found: \[ \text{Growth Rate} = \left(\frac{12,600 - 6,300}{6,300}\right) \times 100 = \left(\frac{6,300}{6,300}\right) \times 100 = 100% \]

Therefore, the growth rate of Nominal GDP from 2007 to 2008 is 100%.