Essentials of Economics 7th Edition by Gregory Mankiw

Exercise 2

Below are some data from the land of milk and honey.

a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2013 as the base year.
b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2014 and 2015 from the preceding year. For each year, identify the variable that does not change. Explain why your answer makes sense.
c. Did economic well-being rise more in 2014 or 2015? Explain.