An economy only produces cars and beef. Neither production requires intermediate goods. In 2019 200 cars are produced and sold at a price of $15,000 each and 1,000,000 pounds of beef are produced and sold for $7.00 per pound. In 2020 250 cars are produced and sold at a price of $16,000 each and 1,000,000 pounds of beef are produced and sold for $8.00 per pound. (a) (1 point) Calculate the nominal GDP in each year. (b) (4 points) 2019 is the base year. Calculate the real GDP in each year using the chain-weighted method. (c) (1 point) Calculate the GDP deflator and the inflation rate. (d) (4 points) Suppose that cars in 2020 are much better than cars in 2019; One car in 2020 is equivalent to 1.2 cars in 2019. How does factoring in the quality adjustment change your calculations in parts (a) to (c)

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.