Suppose there are five goods in the economy,A-E.The current-year quantity of each is 10A,20B,30C,40D,and 50E.Current-year prices are $1 for each unit of A,$2 for each unit of B,$3 for each unit of C,$4 for each unit of D,and $5 for each unit of E.Base-year prices are $1 for each good.Real GDP in the current year equals
A) $100.
B) $130.
C) $150.
D) $180.
E) $550.

Question

Quizplus · Accepted Answer

Real GDP is calculated by valuing the current-year quantities at base-year prices. Since the base-year price for each good is $1, the real GDP is the sum of the quantities of all goods: 10A + 20B + 30C + 40D + 50E = 150.

Suppose There Are Five Goods in the Economy,A-E