Which Is the Most Accurate Statement About the GDP Deflator

question 98

Multiple Choice

Which is the most accurate statement about the GDP deflator and the consumer price index?

• A)The GDP deflator compares the price of a fixed basket of goods and services to the price of the basket in the base year,whereas the consumer price index compares the price of currently produced goods and services to the price of the same goods and services in the base year.
• B)The consumer price index compares the price of a fixed basket of goods and services to the price of the basket in the base year,whereas the GDP deflator compares the price of currently produced goods and services to the price of the same goods and services in the base year.
• C)Both the GDP deflator and the consumer price index compare the price of a fixed basket of goods and services to the price of the basket in the base year.
• D)Both the GDP deflator and the consumer price index compare the price of currently produced goods and services to the price of the same goods and services in the base year.

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Definitions:

Expanded

Increased in area, scope, or size; enlarged or extended.

Income

A measure of money that individuals or businesses receive, usually through wages, investments, or sales.

Voting

The action of expressing a choice or opinion in matters such as electing public officials, passing laws, or making decisions in referendums, typically through a ballot.

Relationship

A connection, association, or involvement between people, whether personal, professional, or societal.