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Consider an economy that produces only three types of fruit: apples, oranges & bananas. In the base year the production & price data are as follows:
Fruit Quantity Price
Apples 3000 Unit Rs. 2 per unit
Bananas 6000 Unit Rs. 3 per unit
Oranges 8000 Unit Rs. 4 per unit
In the current year the production & price data are as follows:
Apples 4000 Unit Rs. 3 per unit
Bananas 14,000 Unit Rs. 2 per unit
Oranges 32,000 Unit Rs. 5 per unit
a) Find nominal GDP in the current year & in the base year. What is the percentage enhancing since base year?
b) Find real GDP in the current year & in the base year. By what percentage does a real GDP enhancing from the base year to present year?
c) Find the GDP deflator for the current year & the base year. By what percentage does the price level change from the base year to present year?
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