Final answer:
Real GDP in 2017, using 2016 as the base year, is calculated by multiplying the quantities of goods produced in 2017 by their prices in 2016. The sum of these products for hamburgers and hot dogs gives a real GDP of $12,000.
Step-by-step explanation:
The question asks for the calculation of the real GDP in 2017 using the base year prices of 2016. Real GDP represents the value of all goods and services produced at constant prices, removing the effects of inflation. To calculate the real GDP for 2017, we use the quantities of 2017 but price them using the 2016 prices:
- Hamburgers: 300 units * $20 (2016 price) = $6,000
- Hot dogs: 600 units * $10 (2016 price) = $6,000
Adding these together gives us a real GDP for 2017 of $6,000 (hamburgers) + $6,000 (hot dogs) = $12,000.
Real gross domestic product (GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year. Real GDP is expressed in base-year prices. It is often referred to as constant-price GDP, inflation-corrected GDP, or constant-dollar GDP. Put simply, real GDP measures the total economic output of a country and is adjusted for changes in price.
Real GDP is a macroeconomic statistic that measures the value of the goods and services produced by an economy in a specific period, adjusted for price changes. Essentially, it measures a country's total economic output, taking price changes into account—whether they are due to inflation or deflation.