My book says the way we calculate real GDP in a given year is by adding the quantities of all goods and services produced in that year multiplied by their prices in some base year. There are actually two things I can't quite get:
How do we account for goods and services that exist now but weren't around in the base year? I mean, especially today, with things such as the market for apps, startups, and the increasing number of new products that get released on an almost daily basis, wouldn't the real GPD calculated that way become dated really fast?
This might turn out to be a really silly question, but how do we take into account quantities of services that are provided in a given year, such as lawyer services, marketing services etc.? All examples I've seen of calculating real GDP were of the sort "consider an economy that produces only apples an orange...".
Thanks very much in advance.