Assume that in year 2013 a country produces 12 cars and 8 bicycles. The CPI basket of that country includes 1 car, 2 bicycles and 10 gallons of gas (which are imported). Suppose that in 2013 the price of a car is $ 150, the price of a bicycle $ 25 and the price of a gallon of gas $ 1. In 2014 the country produces 12 cars and 12 bicycles and the prices of cars and bicycles are unchanged but the price of a gallon of gas increases to $ 2. Compute the CPI and GDP deflator in 2013 and 2014. Explain the difference between these two measures.