Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012.

-Real GDP is equal to:
A) current prices * base year output.
B) current prices * current output.
C) base year prices * base year output.
D) base year prices * current output.
E) current output 2 base year prices.

Question

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012.
 
-Real GDP is equal to:
A) current prices * base year output. 
B) current prices * current output. 
C) base year prices * base year output. 
D) base year prices * current output. 
E) current output 2 base year prices.

Quizplus · Accepted Answer

Real GDP measures the value of goods and services produced in an economy by holding constant the prices of a base year. Therefore, it is calculated using base year prices and current output. Option D is the correct answer as it uses base year prices (2012) and current output to calculate real GDP.

Consider the Following Data That Gives the Quantity Produced and Unit