HOMEWORK 4(20 points)THIS ASSIGNMENT IS DUE ON MONDAY, OCTOBER 4.Write your answers in the spaces provided. If you need extra space, use the backs ofthe pages. (Make sure you read and understand the policies regarding homeworkassignments: a available on my website)Use the following data about the economies of Argentina and Chile to answer thequestions below.ARGENTINA CHILEYEARNOMINALGDP(millions ofArgentine pesos)GDP PRICEINDEX(GDPDEFLATOR)NOMINALGDP(billions ofChilean pesos)GDP PRICEINDEX1986 9.98 43.88 3419.2 80.231987 23.33 100.00 4540.6 100.001988 111.00 484.70 5918.2 121.421. Calculate REAL GDP for each year above for both countries. SHOW EACH CALCULATION, USING THE APPROPRIATE FORMULA. (8 points: 2 points for correct “procedure;” 6 points for correct calculations)2. Which measure of national output/income, nominal GDP or real GDP, is more “important?” Explain briefly. (3 points)3. Calculate the RATE OF INFLATION for 1987 (1986 to 1987) and for 1988 (1987 to 1988) for both countries. SHOW EACH CALCULATION. (6 points: 2 points for correct “procedure;” 4 points for correct calculations)24. What PHASES OF THE BUSINESS CYCLE did Argentina experience from 1986 through 1988? EXPLAIN your choice using appropriate information from the data given on the other side and/or your calculations. (HINT: Only one indicator tells you what phase of the business cycle the economy was in; if you refer to the wrong one or more than one, points will be deducted. Drawing a diagram with appropriate data may help).(3