1. (20 points) Computerland is a small country which produces three goods: desktops, laptops, and tablets.
The prices and quantities for three consecutive years are as follows.
\begin{tabular}{|l|l|l|l|l|l|l|}
\hline
& \multicolumn{2}{c|}{2012} & \multicolumn{2}{c|}{2013} & \multicolumn{2}{c|}{2014} \\
\hline
& Price & Quantity & Price & Quantity & Price & Quantity \\
\hline
Desktops & 10 & 20 & 10 & 18 & 12 & 24 \\
Laptops & 10 & 50 & 9 & 40 & 12 & 60 \\
Tablets & 5 & 50 & 5 & 45 & 8 & 55 \\
\hline
\end{tabular}
a. Calculate nominal GDP in 2012, 2013, and 2014.
b. Calculate real GDP in constant dollars with the 2012 base year.
c. Calculate real GDP in constant dollars with the 2013 base year.
d. Explain why the real GDP in constant dollars might be inaccurate measure of economic activity?
e. Calculate GDP deflator for both real GDP in (b) and (c).
f. Is the economy growing? If so, how much?