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Table: Real and Nominal Output
-(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Assuming year 3 is the base year, real output in year 4 is:
A)$100.
B)$120.
C)$140.
D)$200.

Question

Use the following to answer questions:
Table: Real and Nominal Output 
-(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Assuming year 3 is the base year, real output in year 4 is:
A)$100. 
B)$120. 
C)$140. 
D)$200.

Quizplus · Accepted Answer

To calculate real output in year 4, we need to use the formula Real Output = (Nominal Output / Price Level) x 100. The price level in year 4 is 1.4, as given in the table. Therefore, Real Output in year 4 = (200 / 1.4) x 100 = 140.

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