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

Year Price of Milk Quantity of Milk Price of Honey Quantity of Honey 2020 $1 100 quarts $2 50 quarts 2021 1 200 2 100 2022 2 200 4 100

a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2020 as the base year.

b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2021 and 2022 from the preceding year. For each year, identify the variable that does not change. Explain why your answer makes sense.

c. Did economic well-being increase more in 2021 or 2022? Explain.