2015 2019 Good Quantity Price Quantity Price

Pretzels 400 $3 500 $4

Vodka 400 $4 900 $4

a. Using 2015 as the base year, compute the following statistics for each year: nominal GDP, real GDP, the implicit price deflator for GDP, and a fixed weight price index such as the CPI.

b. By what percentage did prices rise between 2015 and 2019. Give the answer for each good and for the two measures of the overall price level. Compare these two answers and explain what is the reason for the difference?

c. Which one do you prefer as a manager for Netflix? Explain.

d.. Your associate would like you to change the second year to 2020. Would you agree or disagree?