Economic Data for the Economy of LOVE Republic

Figure 1: Production and Price levels

Quantities (tons) 2019

Strawberry 600

Blue Berry 860

Goose Berry 680

Price ($ million) 2019

Strawberry 24

Blue Berry 36

Goose Berry 54

Figure 2: 2020 Macroeconomic data

2020

520

720

720

2020

28

30

62

1.1 Use the production and price data of LOVE Republic and answer the following questions:

a. Calculate the nominal GDP in 2019 and 2020 for LOVE Republic. (4 Marks)

b. Using 2019 as the base year, calculate the real GDP in 2020 for LOVE Republic.

(4 Marks)

c. Calculate the GDP deflator in 2020 and explain the function of a GDP deflator.

(3 Marks)