Question

The United States produces two goods: guns (G) and butter (B). In 1990, the US

produced 10 guns (at a price of $10) and 10 sticks of butter (at $10 a stick). In 2000, the
US produced 8 guns (at a price of $20) and 20 sticks of butter (at a price of $15).
Nominal GDP in 1990 is _

Answer 1

The Nominal GDP for the United States in 1990 was $200, which is calculated by summing up the product of quantities and prices of all goods produced, in this case, guns and butter.

Step-by-step explanation:

To calculate the Nominal GDP in 1990 for the United States, we need to multiply the quantity of each good produced by the price at which it was sold and sum the totals for both goods. The calculation is as follows:

• Guns: 10 guns × $10 per gun = $100
• Butter: 10 sticks of butter × $10 per stick = $100

Adding these amounts together gives us:

• Nominal GDP in 1990 = $100 (for guns) + $100 (for butter) = $200

In other words, the Nominal GDP for the United States in 1990 was $200. This is the sum of the current dollar values of all the goods and services produced within the country's economy in that year, without adjusting for inflation.