a.An economy produces three goods: orange, mango and mango juice. It is assumedthat half of the mango are bought and consumed as final good; the other half is used to produce mango juice.

In 2019, 400 KGs of oranges are produced at Rs.60/kg, 1000 KGs of mangoes are produced at 120/kg, and 150 Glasses of mango juice are produced at Rs.200/glass.

In 2020, 425 KGs of oranges are produced at Rs.55/kg, 1250 KGs of mangoes are produced at 140/kg, and 200 glasses of mango juice are produced at Rs.210/glass.

a.In each of the following cases, does the increase in prices affect CPI, GDP deflator, or both in Pakistan? Analyze and justify your answer.

i.The price of imported capital goods used in the production of wheat has increased.

ii.The price of mangoes has increased.