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Question: consider an economy that only produces and consumes milk and...

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Consider an economy that only produces and consumes milk and cars. In table 1 are data from two different years. Table 1: GDP and Prices Year 2000 Year 2016 Number of milks produced Price of a car Number of cars produced S1$2 500 S50 100 400 $100 120 (a) Using the year 2000 as the base year, compute for 2000 and 2016 the following statistics: nominal GDP, real GDP, the price deflator and the CPI. 15 points b) How much have prices risen between year 2000 and 2016 using the CPI[3 points (c) How much have prices risen between year 2000 and 2016 using the GDP deflator.[3 points (d) In general, the inflation computed with the GDP deflator differs from the inflation derived from the CP. 1 this true in this problem? Explain why? 17 points

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