Assume that people only consume 3 different goods. The following table shows the prices and quantities of each good consumed in 2006, 2007, and 2008.

Year Price ofA Quantity of A Price of B Quantity B Price of C Quantity C

2006 $6 300 $7 125 $9 100

2007 7 450 6 150 11 125

2008 8 800 5 175 14 150

A.Calculate nominal GDP in each of the three years.

B.Calculate Real GDP in each of the three years, using 2006 as the base year.

C.Using the real GDP figures calculated in (b) above, calculate annual growth rate of output for years 2007 and 2008.

D.Calculate the GDP deflator for each of the three years using 2006 as the base year.

E.Calculate the CPI (consumer price index) for 2006, 2007 and 2008 using 2006 as a base year.

F.Comment briefly on the movement of prices over the three years as indicated by CPI and GDP deflator