The chain-weighted output index method of calculating real GDP compares
A) compares the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output.
B) quantities produced in different years using prices from a year chosen as a reference period.
C) quantities produced in different years with the prices that prevailed during the year in which the output was produced.
D) prices at different points in time using a sample of goods that is representative of goods purchased by households.

Question

Quizplus · Accepted Answer

The chain-weighted output index method calculates real GDP by comparing the quantities of goods produced in consecutive years using prices from both years and then averaging the percentage changes in the value of output. This approach helps to provide a more accurate measure of real GDP over time by taking into account changes in the prices and quantities of goods.

The Chain-Weighted Output Index Method of Calculating Real GDP Compares