For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below.

-Suppose that Year 2 is the base year. Year 1 real GDP is
A) $200.
B) $270.
C) $310.
D) $390.
E) $450.

Question

For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below.
 
-Suppose that Year 2 is the base year. Year 1 real GDP is
A) $200. 
B) $270. 
C) $310. 
D) $390. 
E) $450.

Quizplus · Accepted Answer

Real GDP is calculated using the prices from the base year. If Year 2 is the base year, then Year 1's real GDP is calculated using Year 2's prices, which is $270.

For the Following Question(s), Suppose That an Economy Produces Only