Assume an economy that is producing only one product. Output and price data for a three-year period are as follows.

Answer the question on the basis of these data.
year units of output price per unit
1 20 4
2 25 4
3 30 6
Refer to the above data. If year 2 is chosen as the base year, real GDP for year 1 is:

a) $25.
b) $100.
c) $20.
d) $80.

ANSWER:

d) $80.