Real - Vs. - Nominal GDP

The economy of country X produces 2 goods, bread and butter. In 2019, 740,000 units of bread was sold at $0.55 each and 650,000 units of butter at $0.64 each. From 2019 to 2020, price of bread increased by $0.15 and the units sold fell by 30,000; the price of butter fell by $0.04 and units sold rose by 38,900.

a. Calculate Nominal GDP in 2019 and 2020.Calculate Real GDP in 2020 using 2019 as the base year.

2019 Nominal value for Bread: $________________________

2019 Nominal value for Butter: $________________________

2019 Nominal GDP: $ ____________________________________

2020 Nominal value for Bread: $________________________

2020 Nominal value for Butter: $________________________

2020 Nominal GDP: $ ____________________________________

2020 Real value for Bread: $________________________

2020 Real value for Butter: $________________________

2020 Real GDP: $ ____________________________________

b. To evaluate GDP growth rate which of the two values, Real or Nominal GDP, should be used? Explain