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Help me with this Macroeconomics Q Part 5- FRQ Practice- Complete the following question from the 2008 AP exam. OUTPUTS AND PRICES IN GALA LAND

Help me with this Macroeconomics Q

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Part 5- FRQ Practice- Complete the following question from the 2008 AP exam. OUTPUTS AND PRICES IN GALA LAND This Year's Output This Year's Price 500 loaves of bread $8 per loaf 600 gallons of water 51 per gallon 800 pieces of fruit $6 per piece 3. Gala Land produces three nal goods: bread, water, and fruit. The table above shows this year's output and price for each good. (a) Calculate the year's nominal gross domestic product (G DP). (b) Assume that in Gala Land the GDP deflector (GDP price index) is 100 in the base year and 120 this year. Calculate each of the following (i) The inflation rate, expressed as a percentage, between the base year and this year. (ii) This year's real GDP (c) Since the base year, workers have received a 20 percent increase in the nominal wages. If workers face the same inflation that you calculated in part (i), what has happened to their real wages? Explain (d) If the GDP deflator in Gala Land increases unexpectedly, would a borrower with a fixed-interest-rate loan be better off or worse? Explain

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