2. Use the information in Problem 1 about the economy of Fruitopia. Suppose that the Bureau of Labor Statistics of Fruitopia calculates the CPI using a fixed basket of goods: 8 bushels of apples and 6 bushels of oranges. a. Calculate CPI in 2020 and 2021, with 2017 as the base year (the value of the fixed basket in 2017 is $30). What was the percentage increase in the price level from 2020 to 2021 according to the CPI? b. Based on the information in Problem 1, calculate the GDP deflator for 2021. What was the percentage increase in the price level from 2020 to 2021 according to the GDP deflator? (Hint: see Chapter 5 of your textbook.) c. Compare your answers to parts (a) and (b). Comment.
2. Use the information in Problem 1 about the economy of Fruitopia. Suppose that the Bureau of Labor Statistics of Fruitopia calculates the CPI using a fixed basket of goods: 8 bushels of apples and 6 bushels of oranges. a. Calculate CPI in 2020 and 2021, with 2017 as the base year (the value of the fixed basket in 2017 is $30). What was the percentage increase in the price level from 2020 to 2021 according to the CPI? b. Based on the information in Problem 1, calculate the GDP deflator for 2021. What was the percentage increase in the price level from 2020 to 2021 according to the GDP deflator? (Hint: see Chapter 5 of your textbook.) c. Compare your answers to parts (a) and (b). Comment.
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter24: Measuring The Cost Of Living
Section: Chapter Questions
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Hi attached is problem one that supplements problem 2 could you please answer problem 2
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