# Below are some data from the land of milk, honey, and cheese. EXPLAIN YOUR ANSWERS WELL. SHOW ALL EQUATIONS YOU USED IN CALCULATIONS. Price of Quantity

Below are some data from the land of milk, honey, and cheese. EXPLAIN YOUR ANSWERS WELL. SHOW ALL EQUATIONS YOU USED IN CALCULATIONS. Price of Quantity Price of |Quantity Price of Quantity milk Year of milk \$3 \$3 \$5 Honey of Honey cheese of cheese \$10 \$15 \$20 \$3 2012 100 50 100 150 50 150 \$4 2013 50 2014 a. Calculate nominal GDP, real GDP, and the GDP deflator for each year using 2012 as the base year b. Compute the growth rate of nominal GDP, real GDP and GDP deflator in 2013 and 2014 c. Did economic well-being (measured by the growth rate of real GDP) rise more in 2013 or in 2014? Explain 200 120 \$5 Assume that the typical consumer basket consists of 20 pounds of apple and 10 pounds of cheese. Assume that the base year is 2015. The prices are given in the following table: Apple Cheese Price Price \$2 \$15 \$20 \$30 2013 2014 \$2 \$4 2015 Calculate CPI and compute the inflation rate of CPI