Calculating GDP deflator for each year. GDP Deflator for 2007 = *100 = 100 GDP Deflator for 2012 =*100 = 68 GDP Deflator for 2017 =*100 = 100 GDP Deflator for 2022 =*100 = 132 According to additional information given in Table 2, nominal GDP and real GDP for each year based on 2017 can be calculation. As a result, the GDP deflators can be calculated based on 2017. GDP deflators= Nominal GDP/ Real GDP. Year 2007 2012 (base year) 2017 2022 Nominal GDP $1471bn Indeterminate $1000bn $1320bn Real GDP $1471bn Indeterminate $1000bn $1000bn GDP deflators 100 68 100 132 GDP for Year 2007 Flow of production in 2012 prices: Consumption (c) = (20*10+15*10+5*20+25*6+20*5) =$700bn Government Expenditure (G) = $100bn Investment (I) =$200bn Net Exports (X-M) = $0 GDP2007 (2012 prices) = C+G+I+(X-M) = 700+100+200+0 =$100bn Nominal GDP2007(2007 prices) ==$1471bn Real GDP2007(2017 prices) ==1471bn GDP for year 2012 Flow of production approach in 2017 prices: Consumption (c) =$500bn Government expenditure (G)=Not given Gross Investment (I) =$200bn Net Export (X-M) =$-100bn As there is not enough information to calculate in 2012 by this approach Flow of earning approach in 2017 prices: Interest =Not given Wages =$300bn Profit= $150bn Rent =$100bn Indirect Taxes =$80bn As can been seen Interest is not given. Therefore, GDP for 2012 cannot be calculate in both approaches GDP for year 2017 GDP in 2007 prices: Value added=$900bn Indirect Taxes=$100bn GDP2017(2007prices) = value added (900) + Indirect Taxes(100) = $100bn Nominal Without Investment = C+I+G+(X-M) = (20*10+15*10+5*20+25*6+20*5) + unknown+0= unknown = C+I+G+(X-M) = 550+ (170+30) + 50-170= 700 Nominal = 700*100/115=609 = 609*122/100=743 = C+I+G+(X-M) = 600+150+150-50=850 Nominal = 850*122/100=1037 = i+ w+ r+ p+ indirect tax = 140+ (400-140-80) + (490+80+100-100-50) +60=900 Nominal = 900*100/122=738 With Investment Proposal A MPC=ΔConsumption/ΔIncome According to Table 1, the consumptions of each year can be calculated as follow. Year 1(60000), Year 2(61600), Year 3(63200), Year 14(64800), Year 5(66400) Hence, MPC=ΔConsumption/ΔIncome = (1600+1600+1600+1600) / (1000+1000+1000+1000) = 1.6 Investment Multiplier= 1/ (1-MPC) = -1.7 = 30*(122/155)*(-1.7) = -54 with investment= 900-54=846 Proposal B with investment= total value of output- intermediate inputs +indirect tax = 1200-300+100= 1000 with investment= 100*12/115=1061