Answer the question based on the following data, using year 1 as the base year. All dollars are in billions. Refer to the above data. Real GDP increased from year 3 to year 4 by approximately:
A) $68 billion
B) $75 billion
C) $98 billion
D) $215 billion

Question

Answer the question based on the following data, using year 1 as the base year. All dollars are in billions.  Refer to the above data. Real GDP increased from year 3 to year 4 by approximately:
A) $68 billion 
B) $75 billion 
C) $98 billion 
D) $215 billion

Quizplus · Accepted Answer

To calculate the real GDP, we need to use constant prices. In this case, the base year is year 1. Real GDP in year 3 is $2,720 billion ($2,400 billion x 1.13) and real GDP in year 4 is $2,788 billion ($2,450 billion x 1.14). Therefore, the increase in real GDP from year 3 to year 4 is approximately $68 billion ($2,788 billion - $2,720 billion). Choice A is the best answer.

Answer the Question Based on the Following Data, Using Year