Question 3:

Prices and Quantities

Wheat Rice

Year Price of Wheat Quantity of Wheat Price of Rice Quantity of Rice

2018 PKR 60 100 PKR 50 50

2019 PKR 70 200 PKR 60 150

2020 PKR 80 300 PKR 70 250

Required:

A) Marks (03)

Considering 2018 as the base year and using data given in the above table, calculate the following for 2019 only:

i. Nominal GDP

ii. Real GDP and

iii. GDP deflator

B) Marks (02)

State two major differences between CPI and GDP deflator.