If the price index is year 2 is 200 (percent), then prices in year 2 areprices i
ID: 1113837 • Letter: I
Question
If the price index is year 2 is 200 (percent), then prices in year 2 areprices in the base year Select one: o a. twice as high as b. the same as c. 200 times prices in the base year d. 50 percent of prices in the base year Nominal GdP in year T is the output of goods and services measured in real GdP is the output of goods and services measured in Select one: a. the prices in the base year, the prices in the base year b. the prices in year T, the prices in the base year c. the prices in the base year, the prices in year d. the prices in year T, the prices in year if the nominal GdP in year T were 500, and the price index were 200 (percent) n your T, real GdP in year T would be oqual to Select one: a. nominal GoP o b. 250 c. 500 d. 200Explanation / Answer
Price index = ( Current period price ) / ( Base period price ) * 100
Therefore 200 =( current/base) * 100
Current price / Base Price = 2
So Current price = 2 * Base Price
Price in year 2 (a) twice as high as price in year 1
Nominal GDP in year T is ( b) the prices in year T , real is prices of base year .
Price Index = Nominal GDP / Real GDP
200% = 500 / Real GDP
So , Real GDP = ( 500/200 ) * 100 = 500 / 2 = 250 (b)