Table 12-23 -Refer to Table 12-23

question 29

Essay

Table 12-23
$\begin{array}{|l|c|c|c|c|}\hline& {2013} & & 2018 & \\\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \\\hline \text { Pizzas } & 100 & \$ 10 & 120 & \$ 12 \\\hline \text { Haircuts } & 50 & 15 & 45 & 20 \\\hline \text { Backpacks } & 200 & 40 & 210 & 45 \\\hline\end{array}$
-Refer to Table 12-23.Suppose that a very simple economy produces three goods: pizzas,haircuts,and backpacks.Suppose that the quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.Use the information to compute the real GDP in the year 2013 and 2018.Calculate the real GDP in 2018 assuming the base year is 2013.Do the same calculation assuming the base year is 2018.Are the calculations different? Why?

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Definitions:

Initial Value Method

An accounting approach for investments where the investment is recorded at its original cost without subsequent adjustments for changes in market value.

Equity Method

A method of accounting for investments where the investor's share of the investee's profits or losses is recognized in the investor's income statement.

Investment in Pitts Co.

The allocation of resources, typically financial, into Pitts Company with the expectation of generating a future financial return.

Goodwill

The excess value paid over the net assets of a company during acquisition, reflecting attributes like brand reputation and customer loyalty.