5. Below are some data from the land of milk and honey.

Year Price of Milk Quantity of Milk (litres)

Price of Honey Quantity of Honey (litres)

2013

$1 100

$2 50 2014 1

200 2

100 2015 2

200 4

100

a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2013 as the base year.

b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2014 and 2015 from the preceding year. For each year, identify the variable that does not change. Explain in words why your answer makes sense.

c. Did economic well-being rise more in 2014 or 2015? Explain.