Question:
Consumer Price Index (pound of corn)
Year Current Price Base Year Price Price Index
2006 $1.00 $1.00 100
2007 $1.25 A 125
2008 $1.34 $1.00 B
2009 C $1.00 146
Consider the price index above. What are the values for A, B, and C? Was there inflation from 2006 to 2009? If the price changes above occurred for all goods across the economy during the four year period, explain how nominal GDP and real GDP would differ.