The Consumer Price Index (CPI)and the Gross Domestic Product (GDP)deflator

question 18

Essay

The consumer price index (CPI)and the gross domestic product (GDP)deflator are both measures of inflation.Explain the difference between them.

---

Definitions:

Intra-entity Transfer

Transactions involving the exchange of goods, services, or resources between divisions within the same entity.

Depreciable Asset

An asset that loses value over time due to wear and tear or becoming outdated, which can be deducted against income for tax purposes.

Transfer Price

The price at which goods and services are sold between divisions within the same company or between subsidiaries and the parent company, for internal transactions.

Consolidated Cost

The total cost that combines figures from a parent company and its subsidiaries, reflecting the overall expenses incurred and eliminating intercompany transactions.