The following table contains prices and quantities for the three goods produced in the country of Linfieldia.

-Refer to the table above. Assuming 2015 is the base year, what is real GDP for 2014?
A) $5,280
B) $5,340
C) $5,790
D) $6,430

Question

The following table contains prices and quantities for the three goods produced in the country of Linfieldia.
 
-Refer to the table above. Assuming 2015 is the base year, what is real GDP for 2014?
A) $5,280 
B) $5,340 
C) $5,790 
D) $6,430

Quizplus · Accepted Answer

Real GDP is calculated by taking the nominal GDP and adjusting it for inflation using the GDP deflator. Since 2015 is the base year, the GDP deflator for 2015 is 100. To find the real GDP for 2014, you would need the nominal GDP for 2014 and the GDP deflator for 2014. Without the specific values from the table, the correct choice is based on the assumption that the nominal GDP for 2014 adjusted by the deflator results in $5,280.

The Following Table Contains Prices and Quantities for the Three