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Business, 29.06.2019 04:20 keenonwhite2612

Assume that the government uses a fixed-weight method for calculating real gdp. suppose that in the year after the base year, some prices go up a lot but others go down a little. the problem with the fixed-weight method for calculating gdp in the second year is that: a. consumers substitute the now relatively more expensive goods for the now relatively less expensive goods, but the fixed-weight method values all purchases at base year prices. b. consumers substitute the now relatively less expensive goods for the now relatively more expensive goods, but the fixed-weight method values all purchases at base year prices. c. consumers are forced to buy higher-priced goods and services, even though some prices have fallen. d. the fixed-weight method uses the second year prices to calculate real gdp and thus overstates real gdp.

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Assume that the government uses a fixed-weight method for calculating real gdp. suppose that in the...
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