502PART EIGHTTHE DATA OF MACROECONOMICSTo compute total spending in this economy, we would multiply the quantitiesof hot dogs and hamburgers by their prices. In the year 2001, 100 hot dogs are soldat a price of $1 per hot dog, so expenditure on hot dogs equals $100. In the sameyear, 50 hamburgers are sold for $2 per hamburger, so expenditure on hamburgersalso equals $100. Total expenditure in the economy—the sum of expenditure onhot dogs and expenditure on hamburgers—is $200. This amount, the productionof goods and services valued at current prices, is called nominal GDP.The table shows the calculation of nominal GDP for these three years. Totalspending rises from $200 in 2001 to $600 in 2002 and then to $1,200 in 2003. Part ofthis rise is attributable to the increase in the quantities of hot dogs and hamburgers,and part is attributable to the increase in the prices of hot dogs and hamburgers.To obtain a measure of the amount produced that is not affected by changes inprices, we use real GDP,
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gross domestic product, Value added, hot dogs, T H E D ATA O F M A C R O E C O N O M