Question Details

The chain-weighted output index method of measuring real GDP is based on



1) Valuing the quantities of goods produced in consecutive years using prices in both years and
then averaging the percentage changes in the value of output is part of the ________ method of
calculating real GDP.
A) base-year
B) moving-base-year
C) chain-weighted output index
D) fixed quantities/variable prices
2) The chain-weighted output index method ________.
A) is used to calculate the value of nominal GDP
B) values the quantities produced in a year at the prices of the base year
C) shows that real GDP increases every year
D) uses the prices of two adjacent years to calculate the real GDP growth rate
3) Which of the following is TRUE regarding the chain-weighted output index method?
I. It is the method used to measure the growth rate of nominal GDP.
II. It uses data from the current year and from the previous year.
III. It is a method of measuring the growth rate of real GDP.
A) I and II
B) II and III
C) I and III
D) I, II and III
4) The chain-weighted output index
A) uses only the current yearʹs prices to calculate growth in real GDP.
B) uses prices for the current year and the previous year to calculate growth in real GDP.
C) must be calculated only every other year.
D) is an inaccurate way to measure growth in real GDP and so has been replaced by the
ʺnominal-to-realʺ index.
5) The chain-weighted output index method of calculating real GDP compares
A) compares the quantities of goods produced in consecutive years using prices in both years
and averaging the percentage changes in the value of output.
B) quantities produced in different years using prices from a year chosen as a reference
period.
C) quantities produced in different years with the prices that prevailed during the year in
which the output was produced.
D) prices at different points in time using a sample of goods that is representative of goods
purchased by households.
6) The chain-weighted output index method of measuring real GDP is based on
A) using current prices rather than base year prices
B) averaging the market value of the expenditures over a two year period and then
comparing with a base period.
C) using the prices of two adjacent years to calculate the growth rate of real GDP.
D) averaging the nominal and real measures of GDP to come up with a more accurate figure.
7) At 2010 prices, the value of production in 2011 was 6 percentage points higher than in 2010. At
2011 prices, the value of production in 2011 was 4 percentage points higher than in 2010. Using
the chain-weighted output index, real GDP is ________ in 2011 than in 2010.
A) 10 percent greater
B) 5 percent greater
C) 7.5 percent greater
D) 4 percent smaller
8) Real GDP in 2010 is $10 trillion. Between 2010 and 2011, using 2010 prices, GDP grew 3 percent
and using 2011 prices real GDP grew 7 percent. Using the chain-weighted output index
method, real GDP in 2011 is ________ trillion.
A) $10.5
B) $11
C) $10.1
D) $12.72


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