7. The following table shows nominal GDP and the implicit GDP deflator for three years. Use this information to calculate the real GDP and to answer the following questions. Round to a whole number.

Year Number of CDs Price per CD Number of Pizzas Price per Pizza 1

2 3

Implicit GDP Deflator 1,000 1,000 4,000

$5

$6

$7 8,000 8,000 10,000

$6.00

$6.60

$6.80 Year Nominal GDP Real GDP 1

2 3

206 216 228 98 100 115

a. Which year is the base year?

b. Prices in year 3 were (higher, lower) than prices in the base year.

c. During year 3, nominal GDP

(increased, did not change, decreased).