Assume that all production is consumed in each year Year 1 G

Assume that all production is consumed in each year: Year 1 Good Bread Computers 10 Year 2 Good Bread Computers 15 Quantity Price $10 $50 30 Quantity Price $15 $60 40 A. Using Year 1 as the base year, Year 2 real GDP (not chain-weighted) is B. Using Year 2 as the base year, real GDP in Year 1 (not chain-weighted) is C. If Year1 is the base year and we are not using the chain weighted method, the values of Y1, $ Y1, Y2, and $ Y2 are, respectively

Solution

A) Here as Year 1 is the base year, the Y1 prices are to be considered for the calculation of GDP. So the real GDP of year 2 = 40*$10 + 15*$50= $1150.

B) Here as Year 2 is the base year, the Y2 prices are to be considered for the calculation of GDP. So the real GDP of year 1 = 30*$15 + 10*$60= $1050.

C) No clarity as to what is Y1, $Y1, Y2 and $Y2.