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Consider a simple economy that produces only three products: nail polish, pizzas and t-shirts.The following table provides an information on the price and quantity of these products in three different

years: 2010, 2015 and 2016. 2010 is the base year. 1. Calculate the CPI in 2015 and 2016. 2. Calculate the inflation rate in 2016. Interpret the result.

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