Economy C produces three goods--good X,good Y and good Z.It produces a constant basket of 400units of good X,250 units of good Y and 600units of good Z.The price data for the base year and current year are given as follows:

Price in 2002 (Base Year)...........................Price in 2018 (Current year)

Good X..........................................$2/unit.......................................................$3/unit

Good Y..........................................$6/unit........................................................$6.50/unit

Good Z..........................................$4.50/unit...................................................$4/unit

Questions:

(a) Calculate economy C's Consumer Price Index for 2002 and 2018. Please show all work

(b) Calculate the inflation rate between 2002 and 2018

(c) An economist notices that the CPI for country C was 108.5 in 2015. Calculate the inflation rate between 2015 and 2018.

(d) Suppose that a deflation had occurred between 2002 and 2018. What does this mean about the CPI value in 2018 compared to the base year? Explain.