Question 1 The table below illustrates some GDP data from Saint Vincent and the Grenadines (measured in millions of Eastern Caribbean dollars). Year GDP at constant prices GDP at current prices 2016 1,764 2,078 a) 1. Could 2016 be the base year for the Vincentian GDP? Explain. 2. Is real GDP always smaller than nominal GDP? Explain. 3. What was the GDP price deflator in 2016? 4. What was the inflation rate between the base year and 2016? 5. Can you compute the average annualized inflation rate between the base year and 2016? Explain. 6. Suppose that between 1996 and 2016 the Vincentian real GDP had grown by an average annual rate of 2%. What was the Vincentian real GDP in 1996? Show how you derive your result. 7. Suppose that the Vincentian statistical agency changes the base year; then, would the numerical values of real GDP and nominal GDP in 2016 change or remain the same? Explain