Consider the data shown in the table. Assume that the economy produces only textbooks. What is the growth rate of real GDP between the two years using last year as the base year?
$$\begin{array} { | l | c | c | }
\hline & \begin{array} { c }
\text { Textbooks } \
\text { Sold }
\end{array} & \begin{array} { c }
\text { Actual } \
\text { Price }
\end{array} \
\hline \text { Last year } & 5,000 & \$ 50 \
\hline \text { This year } & 5,250 & \$ 55 \
\hline
\end{array}$$
A)5%
B)10%
C)15%
D)2.5%

Question

Consider the data shown in the table. Assume that the economy produces only textbooks. What is the growth rate of real GDP between the two years using last year as the base year?
$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Textbooks } \
\text { Sold }
\end{array} & \begin{array} { c } 
\text { Actual } \
\text { Price }
\end{array} \
\hline \text { Last year } & 5,000 & \$ 50 \
\hline \text { This year } & 5,250 & \$ 55 \
\hline
\end{array}$$
A)5%
B)10%
C)15%
D)2.5%

Quizplus · Accepted Answer

To calculate the growth rate of real GDP using last year as the base year, we first calculate the real GDP for both years using last year's prices. For last year, real GDP = 5,000 textbooks * $50/textbook = $250,000. For this year, real GDP = 5,250 textbooks * $50/textbook (using last year's price) = $262,500. The growth rate = [(262,500 - 250,000) / 250,000] * 100% = 5%.

Consider the Data Shown in the Table A)5% B)10% C)15% D)2

Consider the Data Shown in the Table A)5%
B)10%
C)15%
D)2