If the price of hot dogs was $2 last year and $3 this year,then 100 hotdogs will contribute
A)$200 to last year's nominal GDP and $166 to this year's nominal GDP.
B)$200 to last year's real GDP and $300 to this year's real GDP.
C)the same dollar amount to each year's nominal GDP because hotdogs are intermediate goods.
D)$200 to last year's nominal GDP and $300 to this year's nominal GDP.

Question

Quizplus · Accepted Answer

Nominal GDP measures the value of final goods and services produced within a country's borders in a given time period at current market prices. Therefore, 100 hot dogs sold at $2 each contribute $200 to last year's nominal GDP. Similarly, 100 hot dogs sold at $3 each contribute $300 to this year's nominal GDP.

If the Price of Hot Dogs Was $2 Last Year