$2.$ Ch$.16$ Problems and Applications Q$5$

A small nation of $10$ people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs$,$ in the following amounts:

Karaoke Machines

CDs

Quantity

Price

Quantity

Price

$($Dollars$)$

$($Dollars$)$

$2020205060520212170806$

Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is$.($Note: Use $2020$ as the base year, and fix the basket at $2$ karaoke machines and $6$ CDs$.)$

Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is$.($Note: Again, use $2020$ as the base year.$)$

Which of the following statements is correct?$$Check all that apply.

The GDP deflator allows the basket of goods and services to change.

The CPI allows the basket of goods and services to change.

The inflation rate in $2021$ is not the same using the two methods.