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Refer to the information provided below to answer the questions that follow. Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year

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Refer to the information provided below to answer the questions that follow. Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 50 75 100 $1.00 $1.00 $1.20 Good Y 100 100 130 $0.60 $0.75 $1.00 c. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year. Compute the value for this economy's real GDP in year 3. (2 marks) d. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, and the GDP deflator in year 1 is 100 and the GDP deflator in year 2 is 135. Calculate the rate of inflation between years 1 and 2. (2 marks)

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