Download Real GDP vs. Nominal GDP Activity

Name ___________________________ Date _____________________ Period ______
Chapter 12 Section 1 Activity
Nominal vs. Real GDP
I.
Why is GDP calculated by both the expenditure approach AND the income
approach. (Use your notes and Chapter 12, Section 1 of your textbook to assist you).
II.
Using the formula below calculate to answer the activity that follows. Show all
of your work. (See page 304 of your textbook for additional help).
Nominal GDP
( # of Products x Price) + (# of Products x Price) = Nominal GDP
Real GDP
Use Base Year Prices
(# of Products x Base Year Price) + (# of Products x Base Year Price) = Real GDP
Suppose that a very small economy produces only televisions and computers.
Using the following information: In Year 1, the base year, 10 computers sold at
$2,000 each and 15 televisions sold at $500 each. In Year 4, 17 computers sold at
$2,200 each and 20 televisions sold at $500 each, determine the Nominal GDP AND
real GDP in YEAR 4 for this nation.
NOMINAL GDP = ______________________ REAL GDP = ____________________
SHOW WORK: