The following table reflects the purchases of an average consumer in Bangladesh. (Assuming these consumers purchase only hand sanitizers and masks.) Suppose 2018 is the base period. Use the table to answer the following questions:

Goods consumed Hand sanitizers Masks

Year Price (dollar per unit) Quantity Price Quantity

2017 30 100 10 50

2018 40 200 6 55

2019 80 500 30 100

(a) Calculate the RPI/CPI of Bangladesh for 2017 and 2019.

(b) Compute the rate of inflation/deflation between 2017 and 2019. Why might not the rate of inflation calculated using the CPI/RPI index be an accurate measure of the cost of living? Explain.

(c) According to Bangladesh Bank data the inflation rate in Bangladesh as of October 2020 is 6.44%, which is around 1% higher compared to that of October 2019. Illustrate and explainwhat sort of impact such persistent inflation can have on the real GDP and employment of the country.