Answer:
a (B) Value of all goods and services produced in the economy this year
this year's prices
Value of all goods and services produced in the economy in the base year
by the base year's prices
Explanation:
Here is the complete question
The GDP price index for this year is calculated by dividing the (A) Value of all goods and services produced in the economy in the base year (B) Value of all goods and services produced in the economy this year (C) cost of a given market basket of goods and services using 2) ______ (A) the base year's prices (B) this year's prices by the 3) ________ A) Value of all goods and services produced in the economy in the base year (B) Value of all goods and services produced in the economy this year (C) cost of a given market basket of goods and services using 4) ______ (A) the base year's prices (B) this year's prices
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP price index = (nominal GDP / Real GDP ) X 100
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
For example, country A produces 10 kg of rice at $10 per kg in 2019 and 50kg of beans at $30 per kg in 2018. In 2019, it produces 10 kg of rice at $20 per kg in 2019 and 50kg of beans at $40 per kg in 2019. 2018 is the base year.
Nominal GDP in 2018 = (10 x $10) + (50 x $30) = $1600
Nominal GDP in 2019 = (10 x $20) + (50 x $40) = $2200
Real GDP in 2018 = (10 x $10) + (50 x $30) = $1600
Real GDP in 2019 = (10 x $10) + (50 x $30) = $1600
GDP price index in 2019 = nominal gdp in 2019 / real gdp in 2019 ) x 100
(2200 / 1600 ) x 100 = 137.5
