Harry's Pizza Parlor produced 10,000 large pizzas last year that sold for $10 each. This year Harry's produced 11,000 large pizzas (identical to last year's pizzas) but sold them for $12 each. Based on
This information, we can conclude that Harry's production of large pizzas
A) increased nominal GDP from last year, but real GDP was unaffected.
B) increased both nominal and real GDP from last year.
C) increased real GDP from last year, but nominal GDP was unaffected.
D) did not change either nominal or real GDP from last year.

Question

Quizplus · Accepted Answer

The production of 11,000 large pizzas this year is an increase from the 10,000 produced last year, indicating an increase in the quantity of goods produced. Additionally, the prices charged for the pizzas increased from $10 to $12, indicating an increase in the overall value of goods produced. Hence, both nominal and real GDP were increased from last year.

Harry's Pizza Parlor Produced 10,000 Large Pizzas Last Year That