a-f

Q. (30 points) Consider the following data for a hypothetical economy that produces two goods, milk and honey. Quantity Produced Prices Milk (litres) Honey ($/kg) Milk (litres) Honey ($/kg) Year 1 100 40 2 6 Year 2 120 25 3 6 a) (5 points) Compute nominal GDP for each year in this economy. What is the percentage change in nominal GDP from year 1 to year 2? b) (5 points) Using year 1 as the base year, compute real GDP for each year. What is the percentage change in real GDP from year 1 to year 2? c) (5 points) Using year 1 as the base year, compute the GDP deflator for each year. What is the percentage change in the GDP deflator from year 1 to year 2? d) (5 points) Using year 2 as the base year, compute real GDP for each year. What is the percentage change in real GDP from year 1 to year 2? 1 e) (5 points) Using year 2 as the base year, compute the GDP deflator for each year. What is the percentage change in real GDP from year 1 to year 2? 1 f) (5 points) Is the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain and discuss