Real GDP is the ________ of all goods and services produced in a period of time using ________ prices.
A) summation; current
B) value; base-year
C) value; 1970
D) value; 1945
E) summation; base-year

Question

Quizplus · Accepted Answer

Real GDP is measured using base-year prices to account for changes in inflation over time. Therefore, option B, which specifies using base-year prices, is the correct answer. Option C and D specify using outdated years, while option E is incorrect because although it specifies using base-year prices, it uses the incorrect term "summation" instead of "value". Lastly, option A is incorrect because it is incomplete - while real GDP is the summation of all goods and services produced in a period of time, it must be qualified with "using base-year prices" in order to accurately describe the concept.

Real GDP Is the ________ of All Goods and Services