Consider the following production data for Kuznetsistan which produces only milk and juice.
2018 2019
Price Quantity Price Quantity
Milk $2/L 5L $3/L 2L
Juice $3/L 5L $4/L 6L
a) Calculate nominal GDP for 2018 and 2019
b) Calculate the growth rate in nominal GDP between these years
c) What can be concluded from this figure?
d) Calculate real GDP for 2018 and 2019 using 2018 as the base year
e) Calculate the growth rate in real GDP between these years
f) What can be concluded from this figure?
g) Calculate the GDP deflator for 2018 and 2019. What does this number represent?
h) Use the GDP deflator to estimate the growth rate of the price level between these two years