Matthew bought an new iPod Touch from a Canadian retailer for $240. It broke later that year. When he complained, the store gave him a new one but charged him a service fee of $60. These two events caused nominal GDP to increase by
A) $240.
B) $300.
C) $180.
D) $60.
E) $0.

Question

Quizplus · Accepted Answer

Nominal GDP is the sum total of all final goods and services produced in a country in a given period of time at their current market prices. In this case, the purchase of the new iPod Touch for $240 increased nominal GDP by $240 as it is a final good. When the store gave him a new one but charged him a service fee of $60, this also contributed to nominal GDP as it is part of the service sector. Therefore, the total increase in nominal GDP is $240 + $60 = $300.

Matthew Bought an New IPod Touch from a Canadian Retailer