Suppose there are five goods in the economy,A-E.The current-year quantity of each is 10A,20B,30C,40D,and 50E.Current-year prices are $1 for each unit of A,$2 for each unit of B,$3 for each unit of C,$4 for each unit of D,and $5 for each unit of E.Base-year prices are $1 for each good.Real GDP in the current year equals _________ and GDP equals _________.
A) $550; $150
B) $130; $530
C) $150; $550
D) $530; $130
E) none of the above

Question

Quizplus · Accepted Answer

Real GDP is calculated by multiplying the quantities of goods and services produced in the current year by their base-year prices. 
Real GDP = (10A x $1) + (20B x $2) + (30C x $3) + (40D x $4) + (50E x $5) = $10 + $40 + $90 + $160 + $250 = $550 
GDP is calculated by multiplying the quantities of goods and services produced in the current year by their current-year prices. 
GDP = (10A x $1) + (20B x $2) + (30C x $3) + (40D x $4) + (50E x $5) = $10 + $40 + $90 + $160 + $250 = $550

Suppose There Are Five Goods in the Economy,A-E