23. The next four questions refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year.

Question

Units of Price
Year output per unit
1 16 $2
2 20 3
3 30 4
4 36 5
5 40 6

(a) If year 2 is the base year, give the price index for year 3.

(b) Give the nominal GDP for year 4.

(c) What is the real GDP for year 4?

(d) Tell which years you would deflate nominal GDP and which years you would inflate nominal GDP in finding real GDP.

Answer 1

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Answer 2

240

Answer 3

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