The consumer bundle contains 20 gallons of fuel, a standard meal at a restaurant, a month of cell phone service. Price Quantity 2010 2011 2010 2011…

month

a) Calculate the cost of the consumer bundle in both 2010 and 2011

b) What is te inflation rate from 2010 to 2011?

c) Compute the nominal GDP for each year.

d) By what percentage did nominal GDP increase between Year 1 and Year 2?

e) Now compute real GDP in Year 2 by using Year 1 prices.

f) By what percentage did real GDP increase between Year 1 and Year 2?

 
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