Bob's Barber Shop cut 3,000 heads of hair in 2009 and 3,100 in 2010. The price of a haircut was $7 in 2009 and $8 in 2010. If 2009 is the base year, what was Bob's contribution to nominal GDP in the year 2010?

Question

Quizplus · Accepted Answer

To calculate nominal GDP for 2010 using 2009 as the base year, we need to use the quantity of haircuts in 2010 and multiply it by the price of haircuts in 2009 (the base year).

Nominal GDP = (quantity in current year x price in base year) + (quantity in current year x price in current year)

Nominal GDP for 2010 = (3,100 x $7) + (3,100 x $8) = $21,700

Therefore, the correct answer is choice letter D.

Bob's Barber Shop Cut 3,000 Heads of Hair in 2009