Problem
In 2019 we produced 1000 tons of oranges and 8 computers. The price per ton of oranges was 10 dollars and the price per computer was 200 dollars. In 2020 we produced 800 tons of oranges and 20 computers. The 2020 price of a ton of oranges was 20 dollars and the price of a computer was 180 dollars.
1. What was the Laspeyres (L) index?
2. What was the Paasche (P) index?
3. What was the GDP Deflator in 2020 (using chain-weighted GDP)? Use 2019 as the benchmark for chain-weighted GDP.
4. What was the inflation rate between the two years (based on chain-weighted GDP)? Use 2019 as the benchmark for chain-weighted GDP.