Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit.

I) [2 pts] Calculate the nominal GDP in 2010.

II) [2 pts] Calculate the real GDP in 2010.

III) [1 pt] Calculate the GDP deflator in 2010.

IV) [2 pts] What does this number from (III) tell you?

[Hint: you need to compare the GDP deflator in 2010 with the GDP deflator in the base year.]

V) [1 pt] Calculate the inflation rate in 2010.