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SaminaBaig
Assume there are only two goods in the economy, french fries and onion rings. In 2009, 1,000,000 servings of french fries were sold for 40 cents each and 800,000 servings of onion rings were sold for 60 cents each. From 2009 to 2010 the price of french fries rose to 50 cents and the servings sold fell to 9000,000; the price of onion rings fell to 51 cents and the servings sold rose to 840,000. Calculate nominal GDP in 2009 and 2010. Calculate real GDP in 2010 using 2009 prices...did you click away yet?
Nominal GDP is easy; just calculate P times Q for each good. For real GDP, use prices from year one multiplied by quantities from year two.