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Below are some data from the land of milk and honey. Year Price of milk antity of milk (litres) Price of honey antity of honey (jars)
(a) Compute nominal GDP, real GDP and the GDP deflator for each year, using 2011 as the base year.
(b) Compute the percentage change in nominal GDP, real GDP and the GDP deflator in 2012 and 2013. For each year, identify the variable that does not change. Explain in words why your answer makes sense.
(c) Did economic well-being rise more in 2012 or in 2013? Explain
Year
Price of milk
Quantity of milk (litres)
Price of honey
Quantity of honey (jars)
2011
€ 1
100
E 2
50
2012
200
2013
E 4
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