For the following question(s), suppose an economy produces only pens and pencils, and that the quantity and price data is given by
this table: $$\begin{array} { | l | l | l | }
\hline & \text { Pens } & \text { Pencils } \
\hline \text { Year 1 quantity } & 15 & 10 \
\hline \text { Year 1 price } & \$ 12 & \$ 12 \
\hline \text { Year 2 quantity } & 17 & 12 \
\hline \text { Year 2 price } & \$ 14 & \$ 15 \
\hline
\end{array}$$
-What is the real GDP in year 1 using base year 2?
A)$360
B)$418
C)$294
D)$300
E)$338

Question

For the following question(s), suppose an economy produces only pens and pencils, and that the quantity and price data is given by
this table: $$\begin{array} { | l | l | l | } 
\hline & \text { Pens } & \text { Pencils } \
\hline \text { Year 1 quantity } & 15 & 10 \
\hline \text { Year 1 price } & \$ 12 & \$ 12 \
\hline \text { Year 2 quantity } & 17 & 12 \
\hline \text { Year 2 price } & \$ 14 & \$ 15 \
\hline
\end{array}$$
-What is the real GDP in year 1 using base year 2?
A)$360
B)$418
C)$294
D)$300
E)$338

Quizplus · Accepted Answer

Real GDP in year 1 using base year 2 prices is calculated by multiplying the year 1 quantities by the year 2 prices: (15 pens * $14) + (10 pencils * $15) = $210 + $150 = $360.

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