Question a.Calculate GDP Deflator for all three years.b.Calculate Inflation rate in year 2 and year 3.c.Now calculate Inflation rate in year 3 compared to year 2. Price Number Market Price Number Market Price Number MarketofYearofValueYearValueYearofValueGood1Goodsof2Goodsof3GoodsofYear 1GoodsYear 2GoodsYear 3GoodsYear 1Year 2Year 3Ice CreamShampooS6$4.00$3.00$2.003$5.0056$3.00$4.001S2Peanut3$45Butter*Year 1 is a base year

GDP is the market value of all goods and services produced in an economy. GDP Deflator is a measure…

Answered: Question a.Calculate GDP Deflator…

Question a.Calculate GDP Deflator for all three years. b.Calculate Inflation rate in year 2 and year 3. c.Now calculate Inflation rate in year 3 compared to year 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a.Calculate GDP Deflator for all three years.

b.Calculate Inflation rate in year 2 and year 3.

c.Now calculate Inflation rate in year 3 compared to year 2.

Price Number Market Price Number Market Price Number Market
of
Year
of
Value
Year
Value
Year
of
Value
Good
1
Goods
of
2
Goods
of
3
Goods
of
Year 1
Goods
Year 2
Goods
Year 3
Goods
Year 1
Year 2
Year 3
Ice Cream
Shampoo
S6
$4.00
$3.00
$2.00
3
$5.00
5
6
$3.00
$4.00
1
S2
Peanut
3
$4
5
Butter
*Year 1 is a base year

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