The table below indicates the price and output data over a five year period for an economy that produces only one good.

-Refer to the above data.If year 2 is the base year,real GDP in year 5 is:
A) $120
B) $90
C) $60
D) $30

Question

The table below indicates the price and output data over a five year period for an economy that produces only one good.
 
-Refer to the above data.If year 2 is the base year,real GDP in year 5 is:
A) $120 
B) $90 
C) $60 
D) $30

Quizplus · Accepted Answer

Real GDP is calculated by taking the nominal GDP and adjusting it for inflation using the base year prices. If year 2 is the base year, the real GDP in year 5 would be calculated using year 2 prices, resulting in $60.

The Table Below Indicates the Price and Output Data Over