Small nation of 10 people loves baked goods. All that these 10 people produce and consume are muffins and cake, in the following amounts. 2011 (base MUFFINS Quantity 10 2012 12 a) Calculate the CPI in 2012. GDP b) Calculate the DP deflator in 2012. Price $40 $60 Quantity 30 50 CAKE Price $10 $12 c) What is the difference between using CPI, versus the fiDP deflator as a measurement of prices?

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