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  3. 7 lounchpad consider an economy that produces and consumes...

Question: 7 lounchpad consider an economy that produces and consumes...

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7. LounchPad . Consider an economy that produces and consumes hot dogs and ham- burgers. In the following table are data for two different years 2013 2015 Good Hot dogs Hamburgers Quantity Quantity Price 250 $4 500 $4 200 $$2 200 $3 a. Using 2010 as the base year, compute the following statistics for each year: nominal GDP, real GDP, the implicit price deflator for GDP, and a fixed-weight price index such as the CPI. b. By what percentage did prices rise between 2010 and 2015? Give the answer for each good and also for the two measures of the overall price level. Compare the answers given by the Laspeyres and Paasche price indexes. Explain the difference.

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