Question

Suppose only one Good ‘X' is produced in the country. Output of ‘Good X during 2018 and 2019 were 100 units and 110 units respectively. The market price of the product during the two years was ₹ 50 and  ₹ 55 per unit respectively.

Calculate the percentage change in Real Gross Domestic Product (GDP) in year 2019, using 2018 as the base year. 

Answer 1

Year	Output produced (units)	Current Year Prices	Nominal GDP = Current year Output × Current year prices	Real GDP = Current year output × Base year price
2018	100	50	100 × 50 = 5,000	100 × 50 = 5,000
2019	110	55	110 × 55 = 6,050	110 × 50 = 5,500

Change in Real GDP = 5,500 - 5,000 = 500

% Change in Real GDP = `"Change in Real GDP"/"Initial Real GDP"xx100 `

= `500/ (5,000) xx 100` = 10%