For the Following Questions, Suppose an Economy Produces Only Food

Multiple Choice

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below.


-The base year matters for the computation of real GDP because

A) otherwise we cannot compute growth rates.
B) relative prices can change over time.
C) it allows an international comparison of GDP.
D) it establishes a target for macroeconomic policy.