Answer:
The correct option is b) USD to GBP; GBP to CHF; CHF to USD.
Explanation:
A triangular arbitrage can be described as the act of taking advantage of a foreign exchange market arbitrage opportunity created by a pricing difference between three different currencies.
A triangle arbitrage method entails three deals, with the first currency being converted to a second, the second currency being converted to a third, and the third currency being converted to the first.
In the question, USD is the first currency, GBP is the second currency, and CHF is the third currency. Based on the explanation above, the three steps which will create triangular arbitrage profit are as follows: first step, convert USD to GBP; second step, convert GBP to CHF, and third step, convert CHF to USD.
Therefore, the correct option is b) USD to GBP; GBP to CHF; CHF to USD.
MC algo 8-18 Valuing Stock Asonia Co. will pay a dividend of $5.10, $9.20, $12.05, and $13.80 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 9.4 percent on the company's stock, what is the stock price?
a. $3708
b. $32.88
c. $42.38
d. $3119
e. $35.41
Answer:
d. $31.19
Explanation:
The computation of the stock price is shown below
Stock Price is
= [$5.10 ÷ (1 + 0.094)^1 + $9.20 ÷ (1 + 0.094)^2 + $12.05 ÷ (1 + 0.094)^3 + $13.80 ÷ (1+0.094)^4]
= $4.66 + $7.69 + $9.20 + $9.63
= $31.19
hence, the option d is correct
An example of a good that is excludable is: _________
a) an outdoor sculpture visible from the street.
b) a television set.
c) broadcast television.
d) an aerial fireworks display.
Answer:
b) a television set
Explanation:
Excludable goods can be regarded as a s private goods, unlike non-excludable goods which are public goods. Instance of this is that
everyone can utilize public road, but going to cinema cannot be for everyone the way they please, this is because, ticket need to be bought to get access, as ticket is bought, this can excludes somebody else since there is because limited seat. It should be noted that good can be regarded as a excludable, in situation whereby supplier of that good successfully prevent individual that do not pay from consuming it. An example of a good that is excludable is television set
The following information was available from the inventory records of Rich Company for January:
Units Unit Cost Total Cost
Balance at January 1 9,000 $9.77 $87,930
Purchases:
January 6 6,000 10.30 61,800
January 26 8,100 10.71 86,751
Sales:
January 7 (7,500)
January 31 (11,100)
Balance at January 31 4,500
A. Assuming that Rich does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar?
a. $47,270.
b. $46,067.
c. $46,170.
d. $46,620.
B. Assuming that Rich maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?
a. $47,270.
b. $46,067.
c. $46,170.
d. $46,620.
Please EXPLAIN answer for a thumps-up. I'm tried of wrong answers, please don't answer it unless you are 100% sure.
Answer:
A. The correct option is b. $46,067.
B. The correct option is d. $46,620.
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation of the answers is now given as follows:
A. Assuming that Rich does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar?
Note: See part A of the attached excel file for the calculation of the of units and cost of goods available for sale.
Since Rich does not maintain perpetual inventory records, this implies that this is a periodic inventory system. And update to inventory in a periodic inventory system are made on a regular basis, such as monthly, quarterly, etc.
From the part A attached excel file, we have:
Units of goods available for sale = 23,100
Cost of goods available for sales = $236,481
Weighted-average cost per unit = Cost of goods available for sales / Units of goods available for sale = $236,481 / 23,100 = $10.2372727272727
Inventory at January 31 = Units of inventory balance at January 31 * Weighted-average cost per unit = 4,500 * $10.2372727272727 = $46,068
From the options the closest one is b. $46,067. Therefore, the inventory at January 31 is $46,067 and the correct option is b. $46,067.
B. Assuming that Rich maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?
Note: See part B of the attached excel file for the calculation of the inventory at January 31 (in bold red color).
Under Perpetual Inventory system, the inventory is updated whenever a purchase or sale is made. It's a procedure that happens in real time.
In the Part B of the attached excel file, the following rates in light red color are made as follows:
Rate on January 6 = ($87,930 + $61,800) / 15,000 = $9.98 per unit
Rate on January 26 = ($74,865 + 86,751) / 15,600 = $10.36 per unit
From the part B attached excel file, we have:
Inventory at January 31 = $46,620.
Therefore, the correct option is d. $46,620.
Even though most corporate bonds in the united states make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. suppose a german company issues a bond with a par value of 1000 euros, 23 years to maturity, and a coupon rate of 5.8 percent paid annually.
Required:
If the yield to maturity is 7.5 percent, what is the current price of the bond?
Answer:
Bond Price= 816.29
Explanation:
Giving the following information:
YTM= 0.075
Coupon= 0.058*1,000= 58
Years to maturity= 23 years
Face value= 1,000
To calculate the price of the bond, we need to use the following formula:
Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Bond Price= 58*{[1 - (1.075^-23)] / 0.075} + [1,000/(1.075^23)]
Bond Price= 626.79 + 189.5
Bond Price= 816.29
Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:
Actual costs 1,550 lbs. at $9.10
Standard costs 1,600 lbs. at $9.00
Determine the (a) quantity variance, (b) price variance, and (c) total direct materials cost variance. Enter favorable variances as negative numbers.
a. Quantity variance $______
b. Price variance $______
c. Total direct materials cost variance
Answer and Explanation:
The computation is shown below;
a.
Materials quantity variance is
= (Actual quantity used × Standard price) - (Standard quantity allowed × Standard Price)]
= (1550 × 9.00) - (1600 × 9.00)
= $(450.00)
= $450 favorable
b.
Direct materials price variance is
Materials Price Variance = (Actual quantity purchased × Actual price) - (Actual quantity purchased × Standard price)
= (1550 × 9.10) - (1550 ×$9.00)
= $155
= $155 unfavorable
c.
Total direct materials cost variance is
= Materials quantity variance + Direct materials price variance
= -$450 + $155
= -$295
= $295 Favorable
Here is some price information on Fincorp stock. Suppose first that Fincorp trades in a dealer market. Bid Asked 55.25 55.50 a. Suppose you have submitted an order to your broker to buy at market. At what price will your trade be executed? (Round your answer to 2 decimal places.) b. Suppose you have submitted an order to sell at market. At what price will your trade be executed? (Round your answer to 2 decimal places.)
Answer:
a. Your trade will be executed at the bid price of 55.25.
b. Your trade will be executed at the ask price of 55.50.
Explanation:
First note that:
The bid price is the highest price a buyer will pay for a security.
The ask price is the lowest price a seller will accept for a security.
Therefore, we have:
a. Suppose you have submitted an order to your broker to buy at market. At what price will your trade be executed? (Round your answer to 2 decimal places.)
Since you are the buyer, your trade will be executed at the bid price of 55.25. This is because the bid price is the highest price you as a buyer will pay for a security.
b. Suppose you have submitted an order to sell at market. At what price will your trade be executed? (Round your answer to 2 decimal places.)
Since you are the seller, your trade will be executed at the ask price of 55.50. This is beecausee the ask price is the lowest price uou as a seller will accept for a security.
The technique for linking a manufacturer's operations with those of all its strategic suppliers and its key intermediaries and customers to enhance efficiency and effectiveness is
Supply chain management
What is the loan balance (in dollars) after the third payment, of a 5 year loan of $100,000 with an APR of 10% and annual payments
Zebra Company sells a segment of its operations at a loss. Zebra has not previously experienced such an event and does not expect to again. The loss from the disposal of the segment should be reported in the income statement as: Select one: A. A separate amount in comprehensive income B. A separate amount in net income from continuing operations C. A separate amount in a discontinued operations section D. As part of cost of goods sold
Answer:
C. A separate amount in a discontinued operations section
Explanation:
Since in the given situation it is mentioned that zebra co sells the segment at a loss so this loss from the sale of the segment that should be reported in the income statement as the distinct amount in the discontinued operating section as the same below the income from continuing operations
Hence, the correct option is c.
Answer:
The answer is "Option C".
Explanation:
The discontinued operations are parts of a company's core business or product line that have been sold or shut down and thus are reported separately on the financial statements from ongoing operations. As a result, any loss from the sale of the segment should indeed be reported as a separate amount inside the income statement's discontinued operations column.
The information below applies to a competitive firm that sells its output for $40 per unit.
• When the firm produces and sells 150 units of output, its average total cost is $24.50.
• When the firm produces and sells 151 units of output, its average total cost is $24.55.
How does the firm's marginal revenue (MR) compare to its marginal cost (MC) when it increases its output from 150 units to 151 units?
a. MR exceeds MC by $7.95.
b. MR exceeds MC by $11.05.
c. MC exceeds MR by $11.05.
d. MC exceeds MR by $13.50.
Answer:
A
Explanation:
Marginal cost is the change in total cost when output is increased by 1 unit
total cost = average cost x quantity
Marginal cost = (151 x 24.55) - (150 x 24.50) = 32.05
marginal
Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity Cost Pool Activity Measure Activity Rate Order size Number of direct labor-hours $ 16.40 per direct labor-hour Customer orders Number of customer orders $ 363.00 per customer order Product testing Number of testing hours $ 71.00 per testing hour Selling Number of sales calls $ 1,488.00 per sales call The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 180 direct labor-hours, 13 hours of product testing, and 6 sales calls.Required: Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?
Answer:
Total allocated costs= $13,266
Explanation:
To calculate the costs allocated to the order, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Order size= 16.40*180= 2,952
Customer orders= 363*1= 363
Product testing= 71*13= 923
Selling= 1,488*6= 8,928
Total allocated costs= $13,266
On June 30, Collins Management Company purchased land for $640,000 and a building for $960,000, paying $800,000 cash and issuing a 7% note for the balance, secured by a mortgage on the property. The terms of the note provide for 20 semiannual payments of $40,000 on the principal plus the interest accrued from the date of the preceding payment.a. Journalize the entry to record the transaction on June 30. June 30.b. Journalize the entry to record the payment of the first installment on December 31. Dec. 31.c. Journalize the entry to record the payment of the second installment the following June 30. Assume a 360-day year
Answer:
hhd
soon after the following URLS
Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,600,000 $ 26,000,000 Net operating income $ 672,000 $ 2,340,000 Average operating assets $ 3,200,000 $ 13,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 16%. Compute the residual income for each division.
Answer and Explanation:
The computation is shown below;
a. The return on investment is
= Margin turnover
= Net operating income ÷ sales × sales ÷ average operating assets
For Osaka
= $672,000 ÷ $9,600,000 × $9,600,000 ÷ $3,200,000
= 21%
For Yokohama
= $2,340,000 ÷ $2,600,000 × $2,600,000 ÷ $13,000,000
= 18%
2. The residual income is
= Net operating income - (average operating assets × rate of return)
For Osaka
= $672,000 - ($3,200,000 × 16%)
= $160,000
For yokohama
= $2,340,000 - ($13,000,000 × 16%)
= $260,000
How does your new budget help you to meet your long-term goal of saving for college?
Answer:
make sure in the budget your savings are enough for college in the time you want
that is the expenditure must not over wegh the income...you should save as much as possible
Answer:
A budget helps create financial stability.
Explanation:
Why is budgeting crucial for college students?Budgeting assists you in achieving your academic and financial objectives.
A budget will also assist you in anticipating unforeseen costs and challenges. Budgeting necessitates difficult decision-making, but creating goals will make the process easier.
How can Budgeting helps individual?A budget aids in financial security A budget makes it simpler to pay bills on time, develop an emergency fund, and save for significant purchases like a car or home by tracking costs and sticking to a plan. A budget, in general, puts a person on a better financial footing in the short and long term.Goal of Budget-A budget is used to plan, manage, track, and improve one's financial status. In other words, a budget keeps you on track toward your long-term financial goals by allowing you to regulate your spending and consistently save and invest a percentage of your income.
Learn more about Budgeting here-
https://brainly.com/question/6663636
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Which of the following non-GAAP disclosures is LEAST LIKELY to create variance between GAAP and non-GAAP operating income:
a. Goodwill impairment
b. Inventory write down
c. Currency loss from closing of a foreign subsidiary
d. Gain on sale of an asset
Answer: c. Currency loss from closing of a foreign subsidiary.
Explanation:
GAAP refers to the industry standard and it gives a clear view of the operations of a business from a financial point of view. On the other hand, the non-GAAP disclosure deviates from the industry standard and in such case, adjustments are made to show company's operations.
The non-GAAP disclosures which is least likely to create variance between GAAP and non-GAAP operating income is the currency loss from closing of a foreign subsidiary.
During 2019, $27,000 of cash dividends were declared and paid. A patent valued at $80,000 was obtained in exchange for land. Equipment that originally cost $20,000 and had $7,000 accumulated depreciation was sold for $13,000 cash. Bonds payable were sold for cash and cash was used to pay for structural improvements to the building. Required a. Compute the change in cash that occurred during 2019. b. Prepare a statement of cash flows using the indirect method
Answer:
a. Change in Cash that occurred during 2019:
Cash outflow $27,000
Cash inflow = $13,000
Net outflow = $14,000
b. Statement of Cash Flows for the year ended December 31, 2019:
Investing activities:
Sale of Equipment $13,000
Financing activities:
Payment of dividends ($27,000)
Net cash outflow = $14,000
Explanation:
a) Data and Calculations:
Cash dividends paid during 2019 = $27,000
Patent purchased = $80,000
Land sold in exchange of patent = $80,000
Sale of equipment = $13,000
Sales of Bonds Payable = Cost of Building Improvements
Rosalia White will invest $3,000 in an IRA for the next 30 years starting at the end of this year. The investment will earn 13 percent annually. How much will she have at the end of 30 years
Answer:
$879,597.65
Explanation:
The future value of an ordinary annuity formula is applicable in this case, since an ordinary annuity is such that payments into the accounts are expected to occur at the end of the periods rather than at the beginning of each year:
FV=yearly payment*(1+r)^n-1/r
yearly payment=$3,000
r=13%
n=number of annual payments =30
FV=$3000*(1+13%)^30-1/13%
FV=$3000*(1.13)^30-1/0.13
FV=$3000*(39.11589796-1)/0.13
FV=$3000*38.11589796/0.13
FV=$879,597.65
What is the present value of a 10-year annuity of $3,000 per period in which payments come at the beginning of each period
Answer: $18984.9
Explanation:
Your question isn't complete as you didn't give the interest rate. Let's assume that the interest rate is 12%.
Therefore, the present value will be:
= 3000 + 3000[1 - (1 + 0.12)^-10+1] / 0.12
= 3000 + (3000 × 5.3283)
= 3000 + 15984.9
= 18984.9
Therefore, the present value is $18984.9
mention any four components of the marketing communication policy
Answer:
Mix advertising, public relations, sales promotion and personal selling
Jeff owns an American put option on 100 shares of ABC stock. The option has a strike price of $32.50 and a September expiration date. The stock has recently been declining in value, currently sells for $27.65 per share, and is expected to continue declining in value. Ignore all costs and taxes. If today is Wednesday, August 14, he: Group of answer choices
Answer: b. can exercise his option and earn a profit.
Explanation:
Put options make a profit when the underlying stock sells for less than the strike price of the option. Furthermore, an American put option can be sold at any time before the option expires.
Jeff can therefore exercise the put option and make a profit today of:
= (32.50 - 27.65) * 100 shares
= $485.00
suppose ta hurricane hits alabama causing widespread damage to houses and businesses the governor of alabama places pirce cielings on all building materials to keep the prices reasonable
Answer:
Shortages of building materials and a slower recovery from the storm
Explanation:
From the question we are informed about an instance, whereby a hurricane hits Alabama, causing widespread damage to houses and businesses. The governor of Alabama places price ceilings on all building materials to keep the prices reasonable. In this case,what most likely result is Shortages of building materials and a slower recovery from the storm.
From law of demand, which expressed that provided other factors remain equal, when price of a good goes higher, then there would be less demand of that good from
people and vice versa. higher price brings lower the quantity demanded, and lower price brings higher the quantity demanded, therefore in the case, above as the price of ceilings on all building materials so that price becomes reasonable people demand more and it leads to Shortages of building materials
_______ is best described as the process of transformation of an idea into a new product or process, or the modification and recombination of existing ones.
Answer: Invention
Explanation:
Invention simply refers to the process for transforming an idea into a new product or the modification and the recombination of existing ones.
Invention is the unique method, or process that's used in the creation of a product or may be an improvement on a product or machine that's already created.
Early in the year,manager John Jacobs set reasonable,understandable,and measurable performance standards and communicated these standards clearly to all team members.Because of these efforts,he should be prepared for the next step in the appraisal process. The first two steps in performance appraisal are establishing performance standards and communicating them to subordinates.The third step is to evaluate performance,and if the first two steps are done correctly,this step is relatively easy.
A. True
B. False
Answer:
A. True
Explanation:
Performance evaluation of an employee should be based on his performance. He should be communicated with expected performance and then analysis should be done against standard and actual performance. When John Jacob has set performance standards and clearly communicates it to all team members the appraisal process would be relatively easy.
"All three levels are required to run an organization or a business smoothy"Justify the statement.
Answer:
"All three levels are required to run an organization or a business " according to my point of view it is true without anyone levels (sector) business or organization not imagine to run
Jenny Manufactures sold toys listed at $360 per unit to Jack Inc. for $306, a trade discount of 15 percent. Jack Inc. in turn sells the toys in the market at $335. Jenny should record the receivable and related sales revenue (per unit) at: Group of answer choices $360 $335 $306 $285
Answer:
$306
Explanation:
Based on the information given Jenny should record the receivable and related sales revenue (per unit) at $306 reason been that we were told JENNY MANUFACTURES SOLD TOYS THAT WAS LISTED AT THE AMOUNT OF $360 PER UNIT TO JACK INC. FOR THE AMOUNT OF $306.
Hence, Jenny will record the RECEIVABLE AND RELATED SALES REVENUE (per unit) at $306.
The new office supply discounter, Paper Clips, Etc. (PCE), sells a certain type of ergonomically correct office chair. The annual holding cost per unit is $25, annual demand is 180,000 chairs, and the ordering cost is $150 per order. The lead time is 5 days. Because demand is variable (standard deviation of daily demand is 30 chairs), PCE has decided to establish a customer service level of 96%. The store is open 300 days per year.
Required:
a. What is the optimal order quantity?
b. What is the safety stock?
c. What is the reorder point?
d. What is the optimal annual total inventory cost?
Solution :
Given data:
Annual demand, D = 180,000 chairs
Ordering cost, F = $ 150 per order
Annual holding cost per unit, C = $25
Lead time of order, L = 5 days
Standard deviation of order during lead time = 30
a). The optimal order quantity
[tex]$=\sqrt{\frac{2FD}{C}}$[/tex]
[tex]$=\sqrt{\frac{2\times 150 \times 180,000 }{25}}$[/tex]
= 1469.69
= 1470 (rounding off)
b). The Z value of the customer service of 90%,
i.e., the probability of 0.90 as per normal distribution table = 1.29
∴ Safety stock = Z value x standard deviation of order during lead time
= 1.29 x 30
= 38.7
= 39 (rounding off)
c). The reorder point
[tex]= \text{Average demand per day} x \text{Demand lead time (day) + Safety stock}[/tex]
[tex]$=\frac{\text{annual demand}}{\text{300 days}} \times \text{ Demand Lead time (days) + Safety stock}$[/tex]
[tex]$=\frac{180,000}{300} \times 5 + 39$[/tex]
= 3039
d). The optimal annual total inventory cost
[tex]$\text{= Annual ordering cost + Annual Inventory carrying cost}$[/tex]
[tex]$\text{= Number of orders} \times \text{Ordering cost + Average inventory} \times }$[/tex] [tex]$\text{Inventory holding cost per unit per year}$[/tex]
[tex]$=\frac{\text{annual demand}}{\text{optimum order quantity}} \times \text{ordering cost+}\frac{\text{optimum ordering cost}}{2}\times C$[/tex]
[tex]$=\frac{180,000}{1470} \times 150 + \frac{1470}{2} \times 25$[/tex]
= 18367.34 + 18375
= $ 36,742.34
You have just deposited $9,000 into an account that promises to pay you an annual interest rate of 6.1 percent each year for the next 7 years. You will leave the money invested in the account and 15 years from today, you need to have $25,650 in the account. What annual interest rate must you earn over the last 8 years to accomplish this goal
Answer:
Annual interest rate = 8.23%
Explanation:
The annual interest rate i must have earn over the last 8 years to accomplish this goal is:
= ((25650/(9000*(1+6.1%)^7))^(1/8))-1
= ((25650/(9000*1.513588))^(1/8)) - 1
= ((25650/13622.29)^(1/8) - 1
= 1.882943323038931^(1/8) - 1
= 1.08231743862 - 1
= 0.08231743862
= 8.231743862%
= 8.23%
Total assets were $78,000 and total liabilities were $42,000 at the beginning of the year. Net income for the year was $15,500, and dividends of $5,000 were declared and paid during the year.
Required:
Calculate total stockholders' equity at the end of the year.
Answer:
$46,500
Explanation:
Accounting equation is stated as :
Assets = Equity + Liabilities
therefore,
Equity = Assets - Liabilities
Equity at Beginning of the Period :
Equity = Assets - Liabilities
= $78,000 - $42,000
= $36,000
Equity at end of the Period
Closing Equity Balance = Opening Balance + Net Income - Dividends
= $36,000 + $15,500 - $5,000
= $46,500
Mainway Toy Company currently has 10,000 shares of common stock outstanding. Its management believes that its current stock price of $95 per share is too high. The company is planning to conduct stock splits in the ratio of 2 for 1 as described in the animation. If Mainway Toy Company declares a 2-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be ____________.
Answer:
$47.50
Explanation:
A stock split implies dividing the existing number of shares into multiples in order to enhance the liquidity of the firm's shares.
It is noteworthy that the stock split does not add any value to the existing stock account balance as well as paid in surplus account value since only the number of issued shares changed , values are kept constant.
share price after split=share price before split/stock split ratio
share price before split=$95
stock split ratio=2/1
share price after split=$95/2/1
share price after split=$95*1/2
share price after split=$47.50
Year Nominal GDP Real GDP GDP Deflator (Dollars) (Base year 2016, dollars) 2016 2017 2018 From 2017 to 2018, nominal GDP , and real GDP. The inflation rate in 2018 was.
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
Answer:
Explanation:
The Real GDP is defined as the Nominal GDP minus the inflation effect.
Real GDP provides a more accurate picture of economic growth than nominal GDP because it uses constant prices, making comparisons between years more meaningful by allowing for comparisons of the actual volume of goods and services without considering inflation.
Let's say you bought apples at 5dollars per pound in 2015. Imagining a country of 1000 people and considering everyone bought a pound apples and only apples in that year, the GDP comes out to be 1000*5 = 5000 dollars.
Now let's say inflation rate is 10 percent in 2016 which will increase the price to 5.5 dollars per pound. Also, in one year, 10 more people were added to the country (No of births - No of deaths = New people in that year), this brings out total population to around 1010.
Also, let's say that the sale of apples remained the same, so the GDP of 2016 comes out to be 1000*5.5 = 5500 dollars.
That's a whooping 10% increase in GDP, right?
But here the catch.
The GDP increased not because the demand increased, but because the price of the good increased.
If we see at previous year's price (Not considering the inflation, also called Real GDP), the GDP is same which is 5000 dollars.
So, in reality, there isn't any increase in GDP.
