2. GDP
Year Price of Quantity of Price of Quantity of
Tacos Tacos Pizza Pizza
2020 $2 1000 $8 500
2021 $2.25 1250 $9 525
2022 $2.50 1400 $10 525
a. Given the data above for a local economy, compute nominal GDP, real GDP, and
the GDP deflator for each year, using 2020 as the base year. (2 pts)
b. Compute the percentage change in nominal GDP and real GDP in 2021 and 2022.
Also, calculate inflation in 2021 and 2022 from the preceding year. (2 pts)
c. Did economic well-being increase more in 2021 or 2022? Explain. (1 pt)