Assume Canadians produce and consume just two goods, beer and donuts. Answer all parts using the numbers in the table below and be sure to show your calculations and reasoning. (a) Using 2020 as the base year, calculate real GDP in 2020 and 2021. (c) Using 2020 as the base year, calculate the GDP deflator in 2021. (d) Using 2020 as the base year, calculate the CPI for 2021. (d) Do your GDP deflator and CPI imply the same change in the price level between 2020 and 2021? If so, why? If not, why not? (e) Now suppose that there is free trade between Canada and the United States in beer, but trade in donuts is forbidden. Assume the price of beer in the United States is $5 in both 2020 and 2021. According to PPP what will be the nominal exchange rate between Canada and the United States in 2020 and 2021? Does the Canadian dollar appreciate or depreciate between 2020 and 2021? 2020 2021 Price of Beer $7 $6 Price of Donuts $1.25 $1.50 Quantity of Beer Produced and Consumed 800 1000 Quantity of Donuts Produced and Consumed 4000 4000