For the following question(s), suppose an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below.

-If Year 2 is the base year,the real GDP of Year 1 is
A) $800.
B) $1050.
C) $1900.
D) $2400.

Question

For the following question(s), suppose an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below.

-If Year 2 is the base year,the real GDP of Year 1 is
A) $800. 
B) $1050. 
C) $1900. 
D) $2400.

Quizplus · Accepted Answer

The real GDP of Year 1 is $1050 because the base year is Year 2, and the real GDP of Year 2 is $1000. The real GDP of Year 1 is 105% of the real GDP of Year 2, so the real GDP of Year 1 is $1050.

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