Question at position 17 Compute the Real GDP for the years, 2021, 2022, and, 2023 using 2022 as the base year.(GDP{2021}=48,GDP{2022}=47,GDP{2023}=65)(GDP_{\left\lbrace2021\right\rbrace}=48,GDP_{\left\lbrace2022\right\rbrace}=47,GDP_{\left\lbrace2023\right\rbrace}=65)(GDP{2021}=45,GDP{2022}=47,GDP{2023}=107)(GDP_{\left\lbrace2021\right\rbrace}=45,GDP_{\left\lbrace2022\right\rbrace}=47,GDP_{\left\lbrace2023\right\rbrace}=107)(GDP{2021}=45,GDP{2022}=43,GDP{2023}=62)(GDP_{\left\lbrace2021\right\rbrace}=45,GDP_{\left\lbrace2022\right\rbrace}=43,GDP_{\left\lbrace2023\right\rbrace}=62)(GDP{2021}=45,GDP{2022}=48,GDP{2023}=72)(GDP_{\left\lbrace2021\right\rbrace}=45,GDP_{\left\lbrace2022\right\rbrace}=48,GDP_{\left\lbrace2023\right\rbrace}=72)

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BlackTom AI · Accepted Answer

First, let’s restate the question and options so we’re all aligned on what’s being evaluated.
Question: Compute the Real GDP for the years 2021, 2022, and 2023 using 2022 as the base year. The given GDP values (nominal GDPs) are:
- GDP2021 = 48
- GDP2022 = 47
- GDP2023 = 65
Answer options:
1) (GDP2021 = 48, GDP2022 = 47, GDP2023 = 65)
2) (GDP2021 = 45, GDP2022 = 47, GDP2023 = 107)
3) (GDP2021 = 45, GDP2022 = 43, GDP2023 = 62)
4) (GDP2021 = 45, GDP2022 = 48, GDP2023 = 72)

Now, we assess each option in light of the base-year concept.
Option 1: GDP2021 = 48, GDP2022 = 47, GDP2023 = 65.
- This option keeps GDP2022 at 47, which matches the given nominal value for the base year when using 2022 as the price/fixed-quantity reference. In a base-year calculation, Real GDP in the base year (2022) should equal the nominal GDP for that year, i.e., 47. Here, GDP2022 = 47, so it is consistent with the base-year principle. The 2021 and 2023 Real GDP values would depend on the relative price levels (the GDP deflators) in 2021 and 2023 relative to 2022. Without explicit deflator data, the option’s stated 2021 and 2023 Real GDP values could be plausible under certain price-level changes, though they’re simply not computable from the given data alone. Overall, this option at least respects the base-year consistency for 2022.

Option 2: GDP2021 = 45, GDP2022 = 47, GDP2023 = 107.
- This option sets GDP2022 correctly at 47, which aligns with the base-year criterion. However, GDP2023 = 107 implies a Real GDP that is more than double the base-year price level adjustment would typically produce, given the nominal 2023 value is only 65. Unless there is a substantial change in the price level (deflator) between 2023 and 2022, a Real GDP of 107 would require a very large positive price adjustment for 2023 in base-2022 terms. Without explicit deflator data showing such a shift, this option appears implausible when we expect Real GDP to be a deflated measure of the 2023 output using 2022 prices.

Option 3: GDP2021 = 45, GDP2022 = 43, GDP2023 = 62.
- A fundamental issue here is that the Real GDP for the base year (2022) should equal the nominal GDP for that year, which is 47. This option sets GDP2022 at 43, which contradicts the base-year principle. Therefore, this option is inconsistent with the basic requirement of using 2022 as the base year.

Option 4: GDP2021 = 45, GDP2022 = 48, GDP2023 = 72.
- This option has GDP2022 = 48, which does not match the base-year nominal value of 47. Since 2022 is the base year, Real GDP in that year should be 47, not 48. Thus, this option violates the core base-year condition. The 2021 and 2023 values (45 and 72) would require their own price-level adjustments, but the misalignment in 2022 already disqualifies this choice.

In summary, when using 2022 as the base year, the Real GDP for 2022 must equal the nominal GDP for 2022, i.e., 47. Options 3 and 4 fail this key criterion, because their 2022 Real GDP values are 43 and 48 respectively, not 47. Option 2 satisfies the base-year requirement for 2022 (47) but then implies an unlikely 2023 Real GDP of 107 given the 2023 nominal of 65 unless there is an extraordinary deflator change, which we do not have data to support. Option 1 preserves the base-year consistency for 2022 (and, at face value, leaves 2021 and 2023 as values that could be defensible with appropriate deflators).

Thus, Option 1 is the only choice that cleanly aligns with the core rule of base-year Real GDP calculation for the year 2022, while the other options introduce inconsistencies with the base-year requirement or rely on unlikely deflator movements without supporting data.

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