$$\begin{array} { | c | c | c | }
\hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \
\hline 1 & 20 & \$ 4 \
\hline 2 & 25 & 4 \
\hline 3 & 30 & 6 \
\hline
\end{array}$$ Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen as the base year, real GDP for year 1 is
A) $25.
B) $100.
C) $20.
D) $80.

Question

$$\begin{array} { | c | c | c | } 
\hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \
\hline 1 & 20 & \$ 4 \
\hline 2 & 25 & 4 \
\hline 3 & 30 & 6 \
\hline
\end{array}$$ Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen as the base year, real GDP for year 1 is
A) $25.
B) $100.
C) $20.
D) $80.

Quizplus · Accepted Answer

To calculate real GDP for year 1 using year 2 as the base year, we use the quantity from year 1 and the price from the base year (year 2). Thus, real GDP for year 1 = 20 units * $4 (price per unit in year 2) = $80.

Assume an Economy That Is Producing Only One Product