Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5.The current year per unit prices of these three goods are A = $2, B = $3, and C = $1.Refer to the above information.If the per unit prices of the three goods each were $1 in a base year used to construct a GDP price index, then real GDP in the current year:
A)is $110.
B)is $115.
C)is $45.
D)cannot be determined on the basis of this data.

Question

Quizplus · Accepted Answer

Real GDP is calculated using base year prices. The quantities are multiplied by the base year prices: (10 * $1) + (30 * $1) + (5 * $1) = $45.

Only Three Goods Are Produced in an Economy in the Following