Use the following to answer questions:
-(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Assuming that 2014 was the base year, the growth rate of real GDP from 2013 to 2014 was:
A) -5%.
B) 4.7%.
C) 11.25%.
D) 20%.

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. Assuming that 2014 was the base year, the growth rate of real GDP from 2013 to 2014 was:
A) -5%. 
B) 4.7%. 
C) 11.25%. 
D) 20%.

Quizplus · Accepted Answer

To calculate the growth rate of real GDP from 2013 to 2014, we use the formula: [(Real GDP in 2014 - Real GDP in 2013) / Real GDP in 2013] * 100. Since 2014 is the base year, the prices from 2014 are used to calculate real GDP for both years. Without the specific numbers from the table, we can't calculate the exact figures, but the correct methodology involves using the base year's prices to calculate real GDP for both years and then finding the percentage change. The answer provided (B) suggests that the correct calculation using the given methodology results in a 4.7% growth rate.

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