Question

(Quantity, Price)

2000
...Popcorn: (200,$1)
....Novels: (50,$20)
.....Shoes: (8,$100)

2001
...Popcorn: (250,$2)
....Novels: (30,$25)
.....Shoes: (10,$80)

If 2000 is the base year, what is the real GDP in 2001?

Answer 1

GDP in 2000 is P*Q using 2000 prices and quantities. SO GDP in 2000 is 200*1 + 50*20 + 8*100

real GDP in 2001 is P*Q using 2000 prices and 2001 quantities. so Real GDP01 = 250*1 + 30*20 + 10*100