Peg's Manicure Manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011.The price of a set of nails was $20 in 2010 and $22 in 2011.If 2010 is the base year, Peg's contribution to nominal GDP in 2010 was ______ and to real GDP in 2010 was _____.

Question

Quizplus · Accepted Answer

Nominal GDP is the value of all goods and services produced in an economy in a given year, valued at current prices. Real GDP is the value of all goods and services produced in an economy in a given year, valued at constant prices. In this case, the base year is 2010, so the prices used to calculate real GDP are the prices from 2010.Peg's contribution to nominal GDP in 2010 is $80,000 (4,000 sets of nails * $20 per set). Peg's contribution to real GDP in 2010 is also $80,000, because the prices used to calculate real GDP are the prices from 2010.

Peg's Manicure Manor Did 4,000 Sets of Nails in 2010