Assume an economy which is producing only one product.Output and price data for a three-year period are as follows.

-Refer to the above data.If year 2 is chosen for the base year,in year 3 nominal GDP and real GDP,respectively,are:
A) $180 and $30.
B) $30 and $5.
C) $180 and $120.
D) $120 and $100.

Question

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows.
 
-Refer to the above data.If year 2 is chosen for the base year,in year 3 nominal GDP and real GDP,respectively,are:
A) $180 and $30. 
B) $30 and $5. 
C) $180 and $120. 
D) $120 and $100.

Quizplus · Accepted Answer

Nominal GDP in year 3 is calculated using the current year prices, which is $180. Real GDP is calculated using the base year prices (year 2), which is $120.

Assume an Economy Which Is Producing Only One Product