# Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken. Also suppose that in 1984 each bucket of chicken was priced at \$ 10. Finally, assume that in 2005 the price per bucket of chicken was \$ 16 and that 22,000 buckets were produced. Instructions: In part a enter your answer as an index number rounded to 1 decimal place. In parts b-c, enter your answer as whole numbers. What is the GDP price index for 1984, using 2005 as the base year? By what percentage did the price level, as measured by this index, rise between 1984 and 2005? What were the amounts of real GDP in 1984 and 2005?

Question

Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken. Also suppose that in 1984 each bucket of chicken was priced at \$ 10. Finally, assume that in 2005 the price per bucket of chicken was \$ 16 and that 22,000 buckets were produced. Instructions: In part enter your answer as an index number rounded to 1 decimal place. In parts b-c, enter your answer as whole numbers.

What is the GDP price index for 1984, using 2005 as the base year?

By what percentage did the price level, as measured by this index, rise between 1984 and 2005?

What were the amounts of real GDP in 1984 and 2005?

Step 1

The following information is given:

Step 2

GDP Price Index can be calculated by the following formula:

Step 3

The GDP Price Index for the years 1984 and 2005 (ta...

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