The drawback to calculating real GDP using base-year prices is that
A) real GDP in one year is not comparable to real GDP in another year.
B) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP.
C) relative prices change over time and these changes are reflected in base-year prices.
D) quality changes are reflected in base-year prices.
Answer: B
You might also like to view...
How did the global savings glut in the 2000s affect the U.S. current account balance?
A) It caused it to decline by increasing the value of the dollar. B) It caused it to decline by reducing the value of the dollar. C) It caused it to increase by increasing the value of the dollar. D) It caused it to increase by reducing the value of the dollar.
________ Treasury bonds tend to have lower interest rates than ________ Treasury bonds
A) Lower coupon payment; higher coupon payment B) Higher denomination; lower denomination C) Longer-maturity; shorter-maturity D) Shorter-maturity; longer-maturity