Suppose that a very simple economy produces three goods: pizzas,haircuts and backpacks.Suppose the quantities produced and their corresponding prices for 2009 and 2013 are shown in the table: Use the information to compute real GDP in the years 2009 and 2013.Calculate real GDP in 2013 assuming the base year is 2009.Real GDP is found by valuing GDP in a particular year using base year prices.When 2009 is the base year,real GDP for 2013 is found by multiplying 2009 prices by 2013 quantities and then adding the values up.Do the same calculation assuming the base year is 2013.Are the calculations different? Why?

Question

Suppose that a very simple economy produces three goods: pizzas,haircuts and backpacks.Suppose the quantities produced and their corresponding prices for 2009 and 2013 are shown in the table:  Use the information to compute real GDP in the years 2009 and 2013.Calculate real GDP in 2013 assuming the base year is 2009.Real GDP is found by valuing GDP in a particular year using base year prices.When 2009 is the base year,real GDP for 2013 is found by multiplying 2009 prices by 2013 quantities and then adding the values up.Do the same calculation assuming the base year is 2013.Are the calculations different? Why?

Quizplus · Accepted Answer

The Answer of Suppose that a very simple economy produces three goods: pizzas,haircuts and backpacks.Suppose the quantities produced and their corresponding prices for 2009 and 2013 are shown in the table:  Use the information to compute real GDP in the years 2009 and 2013.Calculate real GDP in 2013 assuming the base year is 2009.Real GDP is found by valuing GDP in a particular year using base year prices.When 2009 is the base year,real GDP for 2013 is found by multiplying 2009 prices by 2013 quantities and then adding the values up.Do the same calculation assuming the base year is 2013.Are the calculations different? Why?

Suppose That a Very Simple Economy Produces Three Goods: Pizzas,haircuts