Now calculate Year 2 real GDP using Year 1 as the base year: Real GDP = Base Year Prices x Year 2 (Current Year) Quantities Year 2 Real GDP Price Quantity GDP Oil changes $15 6 10. $90 Hamburgers $2 25 $50 MP3 players $150 5 11. $750 Total 12. $ 890 Assume that a country has a closed economy that has only three goods/services. That is, there is no trade with other countries, so the economy has consumption, investment, and government spending, but no net exports. In a given year, the economy produces thirty haircuts that cost $10 each; two factory machines that cost $100 each; one highway repair that costs $500 13. What is total GDP for this economy? 14. What percent of GDP is consumption? 15. What percent of GDP is investment? 16. What percent of GDP is government spending? Exclusions of GDP and an Example