(ii) (1 mark)What does this tell us about good A?

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3. (15 marks) (a) (7 marks)Suppose that a very simple economy produces three goods: milk, pies and cars. Suppose the quantities produced and their corresponding prices for 2010 and 2014 are shown in the following table:20102014ProductQuantityPriceQuantityPriceMilk40$5.0060$6.00Pies80$4.0070$5.00Cars6$60007$7000(i) (1 mark)What is nominal GDP in 2010?

(ii) (1 mark)What is nominal GDP in 2014?

(iii) (1 mark)What is real GDP in 2010, using 2014 as the base year?

(iv) (1 mark)What has been the percentage change in nominal GDP between 2010 and 2014?

(v) (1 mark)What has been the percentage change in real GDP between 2010 and 2014, using 2014 as the base year?

(vi) (2 marks)Calculate the GDP deflator in 2010 and 2014, using 2014 as the base year.

(b) (3 marks)Consider the data below for the labour market of a hypothetical economy:PersonsEmployedUnemployedNot in the labour forceDiscouraged workers2100060022000400(i)(1 ½ marks)Calculate the unemployment rate.