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In the Land of Milk and Honey, they produce two goods: Milk and Honey. In 2014, milk cost $2 a gallon and they produced 20
In the Land of Milk and Honey, they produce two goods: Milk and Honey. In 2014, milk cost $2 a gallon and they produced 20 gallons. Honey cost $1 a pint and they produced 40 pints. In 2015, milk cost $2 a gallon and they produced 24 gallons. Honey cost $1 a pint and they produced 48 pints. In 2016, milk cost $2.50 a gallon and they produced 24 gallons. Honey cost $1.25 a pint and they produced 48 pints. The base year is 2015.
- During which time period did the standard of living improve more? From 2014 to 2015 or From 2015 to 2016
- Calculate real GDP in 2014.
- Calculate nominal GDP in 2015.
- Calculate the GDP deflator in 2016.
- Calculate the rate of inflation from 2015 to 2016. Express your answer as a percentage.
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