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Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit.
I) Calculate the nominal GDP in 2010.
II) Calculate the real GDP in 2010.
III) Calculate the GDP deflator in 2010.
IV) What does this number from (III) tell you?
V) Calculate the inflation rate in 2010.
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