Item Q in 2020 P in 2020 Q in 2021 P in 2021 Population in...

Item Q in 2020 P in 2020 Q in 2021 P in 2021 Population in both years: Bananas 10 $3 12 $6 10 Coconuts 15 $4 13 $4 Fish 20 $5 21 $2 The table above summarizes production, prices, and population on a small desert island in two years, 2020 and 2021. If the base year is 2020, in 2021, real GDP per capita was $

Transcript

00:01 All right, so as an extension to the last video i made, we're going to be looking at how to calculate the real gdp with the same quantity price table, the scheme data that we used with the last video.

00:15 So the last video we calculated the nominal gdp, which measures the value of all the goods and services at the current price, right, manufactured in an economy over a period of time.

00:27 The real gdp measures the value of the goods at a base year's price, right? so real gdp, the main takeaway, or like the main differences, real gdp is just a base year's price, right? bays, year's price, manufactured in an economy over a period of time.

00:52 So what the real gdp actually does, it measures the performance of an economy, right? so it takes a base series price.

00:59 And it sees how much we have produced at that price, right? so we can measure the performance of the economy over the years.

01:11 So let's go into the question here.

01:15 As you can see, the base here is 2013.

01:19 So we will be considering the prices from 2013 and the quantity in 24th, right? because we want to compute the real gdp in 2014.

01:30 So let me write down a quick formula here.

01:32 So real gdp, right? so i'm right down to 2014 because that's what we're looking at here is equal to the quantity of 2014, right? so how much is produced in that year times the price in 2013, right? why? because this is the base year.

01:58 So how we will do this is by going...

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