Consider the following data for a hypothetical economy that produces twogoods, milk and honey.

Quantity Produced: milk (litres) honey ($/kg). milk (litres) honey ($/kg).

Year 1 105 30 3 5

Year 2 135 16 3 4

a. Compute nominal GDP for each year in this economy.

Nominal GDP in year1: (Round your response to the nearest wholenumber.)

Nominal GDP in year2: (Round your response to the nearest wholenumber.)

The percentage change in nominal GDP from year 1 to year 2 is

nothing %.(Round your response to two decimal places. Use the minus sign to enter negativenumbers.)

b. Using year 1 as the baseyear, compute real GDP for each year using the traditional approach.

Real GDP in year 1year 1 prices: $ (Round your response to the nearest wholenumber.)

Real GDP in year 2year 1 prices: $ (Round your response to the nearest wholenumber.)

The percentage change in real GDP from year 1 to year 2 is %.(Round your response to two decimal places. Use the minus sign to enter negativenumbers.)

c. Using year 1 as the baseyear, compute the GDP deflator for each year.(Round your responses to two decimal places. Use the minus sign to enter negativenumbers.)

The GDP deflator in year 1year 1 prices:

The GDP deflator in year 2year 1 prices:

The percentage change in the GDP deflator from year 1 to year 2 is %.

d. Using year 2 as the baseyear, compute the GDP deflator for each year. (Enter your responses rounded to two decimal places. Use the minus sign to enter negativenumbers.)

The GDP deflator in year 1year 2 prices:

The GDP deflator in year 2year 2 prices: