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Assume an economy in which only apple and orange are produced. In year 1, 400 million killograms of apple are produced and consumed and its
Assume an economy in which only apple and orange are produced. In year 1, 400 million killograms of apple are produced and consumed and its price is $1.8 per kilogram, while 450 million killograms of orange are produced and consumed and its price is $1.9 per killogram. In year 2, 380 million kilograms of apple are produced and consumed and its price is $2.3 per kilogram, while 470 million kilograms of orange are prduced and its price is $1.7 per kilogram. (Show the results upto 1 decimal point when required) (a) If the base year is year 1 then the inflation rate between years 1 and 2 is 6.09% (b) If the base year is year 2 then the inflation rate between years 1 and 2 is % (c) The chain weighted inflation rate between year 1 and year 2 is (d) If the base year is year 1 then CPI inflation rate is 6.98%
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