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The country of Econland produces two goods: apples and oranges. The following table shows the quantity of apples and oranges with the price of each

The country of Econland produces two goods: apples and oranges. The following table shows the quantity of apples and oranges with the price of each listed in rupees:

Year 1 Year 2
Quantity Price Quantity Price
Apples 8000 Rs 4 10,000 Rs 3
Oranges 6000 Rs 8 5000 Rs 14

  1. Assume that the base year is Year 1. Find the growth rate of real GDP from Year 1 to Year 2? (5 marks)
  2. Calculate the inflation rate from Year 1 to Year 2 using the GDP deflator? (5 marks)

  1. Rohit, an Indian citizen, owns and manages a pizza shop in New York, United States. He buys fresh cheese and bread produced by U.S. workers, pays bills to a U.S. company, and employs only U.S. citizens. What part, if any, of the pizza shop's production is included in U.S. Gross domestic product (GDP)? (5 marks)

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