Assume that a country produces only two goods, automobiles and fast PCs. In year 1, automobiles cost

Question:

Assume that a country produces only two goods, automobiles and fast PCs. In year 1, automobiles cost $20,000 each and the PCs cost $3,000 each; 1,000 automobiles and 10,000 PCs are produced. In year 2, the price of automobiles has increased to $22,000; because a new, even faster type of PC is about to be introduced, the price of fast PCs has fallen to $700. In year 2, 1,000 automobiles and 15,000 PCs are produced.
(a) Fill in the following table.

(b) Using the technique of chain-weighting, calculate the percentage change in real GDP between year 1 and year 2.
(c) Calculate the GDP deflator for year 2.