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  3. 2 consider an economy that produces only the following three...

Question: 2 consider an economy that produces only the following three...

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2. Consider an economy that produces only the following three products: cookies marshmallows, and graham crackers. In the base year, the production and prices for each product were as follows: Product QuantityPrice 3,000 bags 6,000 bags 8,000 boxes kies $2 per bag S3 per bag $4 per box Marshmallows Graham crackers In the current year, the production and price data are as follows: Product Cookies Marshmallows Graham crackers Qtity Price 4,000 bags$3 per 14,000 bags $2 per bag 32,000 boxes bag $5 per Find nominal GDP in the current year and in the base year. What is the percentage increase since the base year (please round this answer to the nearest whole number)? a. b. Find real GDP in the current year and in the base year. What is the percentage increase since the base year (please round this answer to the nearest whole number)? Find the GDP deflator for the current year and the base year. By what percentage does the price level change from the base year to the current year (please round this answer to the nearest whole number)? c. d. Would you say that the percentage increase in nominal GDP in this economy since the base year is due more to increases in prices or increases in the physical volume of output?
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