When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using
A)chained-weighted prices.
B)fixed-weight prices.
C)current-year prices.
D)fixed base-year prices.

Question

Quizplus · Accepted Answer

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it, and this average changes from year to year, this is called calculating GDP using chained-weighted prices. Chained-weighted prices allow for more accuracy in measuring changes in real GDP over time by incorporating changes in relative prices.

When the BEA Calculates Real GDP Using the Average of Prices