Reference no: EM131646778

3 Inflation

1. The economy produces 2 types of goods. Over the past 3 years, the Bureau of Economic Analysis (BEA) recorded:

Table 1: Quantity and price of output

2014 P Q 2015 P Q 2016 P Q

Good A 10 20 11 20 12 21 Quality and price of output

Good B 100 40 100 45 105 45

1. Compute Nominal GDP and the Nominal GDP growth rate in 2015 and 2016.
2. Compute Real GDP and the Real GDP growth rate in 2015 and 2016. Use 2014 as the base year.
3. Compute the GDP deflator and the growth in the deflator in 2015 and 2016.