2.      National income: growth and inflation. Show all calculations.

	2019	2019	2020	2020	2021	2021
	Price	Quantity	Price	Quantity	Price	Quantity
Peaches	$20	100	22	105	24	110
Pears	$4	25	2	50	1	100

a. Compute nominal and real GDP for each year in an economy that produces only 2 goods, peaches and pears. Use 2019 as the base year.

b. Compute the GDP implicit price deflator for each year. Again, use 2019 as the base year.

c. Find the economic growth rates (Y/Y) and the inflation rates (Y/Y).

d. Repeat parts (a)-(c) using 2020 as the base year.

e. Use the chain-weighted method with geometric averaging to compute real GDP with a base of 2019. Find the new growth rates.

f. Discuss and compare your findings of the 3 methods of computing growth rates. (Using 2019, 2020, and chained estimates).