Use the following to answer questions:
-(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2013 was:
A) $400.
B) $420.
C) $425.
D) $445.

Question

Use the following to answer questions: 
-(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2013 was:
A) $400. 
B) $420. 
C) $425. 
D) $445.

Quizplus · Accepted Answer

Real GDP in the base year is calculated using the prices of the base year itself. Since 2013 is the base year, real GDP for 2013 would be calculated using 2013 prices for both lemonade and cookies, multiplied by their respective quantities in 2013.

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