In 2020 and in 2021, two goods are produced in Zombieland: sniper rifles and Twinkies. In 2020, Zombie Slayers Ltd builds and sells 20 sniper rifles at 1000 each, and in 2021, they produce 25 sniper rifles and sell them at 1500 each. In 2020, Tallahassee Harrelson Inc. produces and sells 10,000 Twinkies for 1.00 each, and in 2021, 12,000 Twinkies are sold for 1.10 each.

a. Calculate nominal GDP in each year. (Slow and Dumb)

b. Calculate real GDP in each year, and the percentage increase in real GDP from 2020 to 2021 using 2020 as the base year. Next, do the same calculations using the chain-weighting method. (Fast and Dumb)

c. Calculate the implicit GDP deflator and the percentage inflation rate from 2020 to 2021 using 2020 as the base year. Next, do the same calculation using the chain-weighting method. (Fast and Dumb)

d. Zombie Slayers Ltd comes up with a new model for sniper rifles in 2021, it only produces this new model in 2021, and there are no 2020 sniper rifles left from 2020. The new 2021 model is much more effective than the 2020 version. That is, sniper rifles are of higher quality in 2021. With one 2021 sniper rifle you can kill twice the number of zombies you would kill with a 2020 sniper rifle. How does this change your calculations in parts (a) to (c)? Explain the differences. (Fast and Smart)