Problem Set 4 Part 1: Inflation50 Points Year CPI 1970 | 38.8 1971 40.5 1972 41.8 1973 44.4 1974 | 49.3 1975 @ 53.8 1976 56.9 1977 &0.6 1978 | 65.2 1979 72.6 1980 82.4 1981 83.2 1982 | 85.2 1983 87.2 1984 93.9 1985 97.2 1986 | 100.0 1987 110.6 1988 118.3 1989 124 Based on the above table answer the following questions; A) What year is the base year? (15) Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 CPI 130.7 136.2 140.3 144.5 148.2 152.4 156.9 160.5 163 166.6 172.2 177.1 179.9 184 188.9 195.3 201.6 207.3 215.3 218.9 B) In which year, did we experience deflation? (15) C) What was the rate of inflation between 2015 and 20227 (15) maintain the same purchasing power? (5) Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CPI 220.1 219.4 229.6 233.0 236.7 237.0 240.0 245.1 251.1 255.7 258.8 271.0 292.7 o Part 2: GDP Deflator-50 Points A) How does Chapter 3 define Nominal GDP? (10) B) How does Chapter 3 define Real GDP? (10) C) According to Chapter 3, changes to Real GDP over time is referred to as (10) D) If Nominal GDP is equal to 1500 and Real GDP is equal to 500, what will the GDP Deflator be equal to? (10) E) If the GDP Deflator was equal to 258.8 in 2020 and 271.0 in 2022, what was the rate of inflation? (Round to the nearest tenth)