1. Using the FRED economic data set, collect inflation for Canada using both implicit price deflator and CPI and answer the following questions: (35 points)

1. What does the index 2015=100 mean?
2. What is the difference between two data series?
3. What was the rate of inflation in the first quarter of 2021 based on each measure? Provide an economic explanation why one is greater than the other. (Hint: you can think of relative price of consumer goods to all goods)
4. Which data is more widely used by policy makers including Bank of Canada?
5. What are the three conditions for a market to be perfectly competitive?

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1. True or False: Purely competitive firms must accept both the output and price from the market. Explain.

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