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

Price of Quantity of Price of Quantity of Year Milk Milk Honey Honey 2008 $1 100 quarts $2 50 quarts 2009 $1 200 $2 100 2010 $2 200 $4 100

a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2008 as the base year.

b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2009 and 2010 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 2009 or 2010? Explain.