At 2015 prices, the value of production in 2016 was 6 percentage points higher than in 2015. At 2016 prices, the value of production in 2016 was 4 percentage points higher than in 2015. Using the chain-weighted output index, real GDP is ________ in 2016 than in 2015.

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Quizplus · Accepted Answer

The chain-weighted output index measures changes in real GDP while accounting for changes in prices from year to year. Since the value of production increased by 6% at 2015 prices and by 4% at 2016 prices, it suggests that prices increased between 2015 and 2016. The chain-weighted output index accounts for these price changes, so we can assume that the increase in value of production translates into an increase in real GDP. Therefore, real GDP in 2016 is 5% greater than in 2015.

At 2015 Prices, the Value of Production in 2016 Was