Final answer:
To calculate the GDP price index for 2014 with 2025 as the base year, we compare the nominal GDP of 2014 with the real GDP of 2025 in 2014 prices. The price index is approximately 45.45, indicating prices have increased significantly by the base year 2025.
Step-by-step explanation:
To calculate the GDP price index for 2014 using 2025 as the base year, we first need to determine the nominal GDP for both years. The nominal GDP for 2014 is 10,000 buckets of chicken multiplied by the price of 10 per bucket, resulting in $100,000. In 2025, the nominal GDP is 22,000 buckets multiplied by the price of 16 per bucket, amounting to $352,000.
Next, we need to consider the real GDP in the base year prices, which would be 22,000 buckets at the 2014 price level of $10, resulting in a real GDP of $220,000 for the year 2025. To find the GDP price index for 2014, we use the following formula: (Nominal GDP / Real GDP) * 100. Using the 2025 values, we get ($352,000 / $220,000) * 100, which equals 160.
To express the 2014 GDP price index with 2025 as the base year, we compare the nominal GDP of 2014 to this calculation: ($100,000 / $352,000) * 160, which simplifies to (10 / 35.2) * 160. After performing the calculation, the GDP price index for 2014 is approximately 45.45.