Question 57
HardOriginal questionAn economy produces only two goods. Year 1 is the base year.
| Good | Price, year 1 (₹) | Quantity, year 1 | Price, year 2 (₹) | Quantity, year 2 |
|---|---|---|---|---|
| Apples | 10 | 100 | 12 | 120 |
| Bread | 20 | 50 | 25 | 60 |
What is real GDP in year 2, at year 1 prices?
Show the answer and explanation
CorrectNot quiteAnswer B
Correct answer: B
Explanation
Real GDP values year 2's quantities at year 1's prices.
10 × 120 + 20 × 60 = 1,200 + 1,200 = ₹2,400.
Worth noting
₹2,000 is year 1's GDP; year 2's quantities are larger.
- Concept
- Real GDP at base prices
- Typical timeTypical
- 100 s
- Your timeYours
- —
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