Question: Explain why the inflation rate calculated using CPI is different than the inflation rate calculated using GDPD in 2017 (the inflation rate is higher with

Explain why the inflation rate calculated using CPI is different than the inflation rate calculated using GDPD in 2017 (the inflation rate is higher with CPI than with GDPD).

Year 1 Good X 50 Good Y 100 Production Year 2 75 100 Year 3 100 130 Year 1 $1.00 $0.60 Prices Year 2 $1.00

Year 1 Good X 50 Good Y 100 Production Year 2 75 100 Year 3 100 130 Year 1 $1.00 $0.60 Prices Year 2 $1.00 $0.75 Year 3 $1.20 $1.00

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