Reference no: EM131650787

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

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