The chain-weighted output index method .
A) shows that real GDP increases every year
B) is used to calculate the value of nominal GDP
C) uses the prices of two adjacent years to calculate the real GDP growth rate
D) values the quantities produced in a year at the prices of the base year

Question

Quizplus · Accepted Answer

The chain-weighted output index method uses the prices of two adjacent years to calculate the real GDP growth rate. It is a more accurate measure of GDP growth as it takes into account changes in prices and the composition of the economy. It does not necessarily show that real GDP increases every year, nor is it used to calculate the value of nominal GDP. While it values the quantities produced in a year, it does so using the prices of both the current and previous year, not just the base year.

The Chain-Weighted Output Index Method