Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Refer to the above data. If year 2 is the base year, then Real GDP in year 5 is:
A) $120
B) $90
C) $60
D) $30

Question

Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year.  Refer to the above data. If year 2 is the base year, then Real GDP in year 5 is:
A) $120 
B) $90 
C) $60 
D) $30

Quizplus · Accepted Answer

Real GDP in year 5 can be calculated by multiplying the quantity produced in year 5 (15) with the price level of the base year (year 2) which is given as $4. Real GDP in year 5 = Quantity of year 5 * Price level of year 2 = 15 * $4 = $60. Therefore, the best choice is C.

Answer the Question Based on the Following Price and Output