Assume an economy in which only chocolate and bananas are produced. In the 1st year (year 1), 750 million kilograms of chocolate are produced and consumed, and its price is $0.8 per kilogram, while 350 million kilograms of bananas are produced and consumed, and the price is $1.1 per kilogram. In the second year (year 2), 1,200 million kilograms of chocolate are produced and consumed, and its price is $0.95 per kilogram, while 400 million kilograms of bananas are produced, and the price is $1.5 per kilogram.

a) Using year 1 as the base year, calculate the GDP price deflator in years 1 and 2, and calculate the rate of inflation between years 1 and 2 from the GDP price deflator.

b) Using year 1 as the base year, calculate the CPI in years 1 and 2, and calculate the CPI rate of inflation. Explain any differences in your results between parts (a) and (b).