In 2015 ItemQuantity The table shows the quantities produced and prices in 2015

Question

In 2015 ItemQuantity The table shows the quantities produced and prices in 2015 and 2016 for an economy which produces only food and fun. The base year is 2016. Calculate real GDP in 2015 and 2016 using the chained-dollar method In terms of what dollars is each of these two real GDPs measured? Quantity Price Price Fun In 2016 Real GDP in 2016 using the chained-dollar method is $ Quantity Price $6 Real GDP in 2015 using the chained-dollar method is $10 >>> Answer with a whole number Real GDP in 2015 and real GDP in 2016 are measured

Explanation / Answer

Real GDP = the sum of the base year price * current year quantity of all the goods

With base year 2016, the real GDP in 2016 using the chained dollar method is

(6*78) + (66*10) = 468 + 660 = $1128

With base year 2016, the real GDP in 2015 using the chained dollar method is

(6*94) + ( 10*54) = 564 + 540 = $1104

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