The Base Year Is 2019

question 62

Multiple Choice

The base year is 2019. A country only produces iPhones. The price of an iPhone in 2017 was $50. The price of an iPhone was $30 in 2019. The quantity of iPhones produced in 2017 was 10,000 units and in 2019 was 20,000 units. Nominal GDP in 2019 equals

• A) $1,000,000.
• B) $600,000.
• C) $500,000.
• D) $200,000.
• E) an amount that cannot be determined without information about real GDP in 2014.

---

Definitions:

Present Value

Today's monetary worth of a prospective money sum or set of cash flow transactions, given a set rate of return.

Annuity

A finance option that grants a regular payment sequence to individuals, chiefly employed as income for retired persons.

Cash Flow

The complete total of funds entering and leaving a business, notably affecting its immediate financial resources.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, which can appear on the income statement as a result of loans, bonds, or credit lines.