Question 3) A simple economy called Economy X produces only three types of products: sunglasses, suntan lotion and swimmers. The table below shows the production and price data for Economy X in 2015 and 2016. Production and Price Data for Economy X 2015 2016 Product Quantity Price per unit Quantity Price per unit (S ($) Sunglasses 1.000 20 1,500 25 Suntan Lotion 500 10 550 11 Swimmers 100 80 110 80 a. Calculate Economy X's Nominal GDP in 2015 and 2016 b. Calculate Economy X's Real GDP in 2015 and 2016. Assume that 2015 is chosen as the base year. c. Calculate the GDP price deflator for Economy X in 2015 and 2016. d. Calculate Economy X's rate of economic growth in 2016. e. Assume that GDP price deflator is used to calculate the inflation rate. Calculate Economy X's inflation rate in 2016. f. Based on your calculations above, what can you say about the differences between Real GDP and Nominal GDP? If we are interested in how fast the economy is growing, should we pay attention to Real GDP or Nominal GDP? Clearly explain why. Question 4) In macroeconomics, it is claimed that the most desirable state for an economy is where its actual GDP equals to its potential GDP (sometimes called natural GDP) a. What is potential GDP? Does potential GDP remain constant overtime? b. Consider the Australian economy since March 2020 (when COVID hit). How has the estimate of potential GDP been affected by COVID? Clearly explain. c. If an economy's actual GDP is lower than its potential GDP, what problem does the economy likely face? d. If an economy's actual GDP is higher than its potential GDP, what problem does the economy likely face