The CPI Differs from the GDP Deflator in That

question 60

Multiple Choice

The CPI differs from the GDP deflator in that

• A)the CPI is a price index, while the GDP deflator is an inflation index.
• B)substitution bias is not a problem with the CPI, but it is a problem with the GDP deflator.
• C)increases in the prices of foreign produced goods that are sold to U.S.consumers show up in the CPI but not in the GDP deflator.
• D)increases in the prices of domestically produced goods that are sold to the U.S.government show up in the CPI but not in the GDP deflator.

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Definitions:

Degree of Interdependence

The extent to which individuals, groups, or systems rely on each other to function effectively.

Operations Technology

The hardware and software solutions used to optimize and automate business operations.

Mechanistic Bureaucracy

An organizational structure that emphasizes detailed procedures and rules, a clear hierarchy, and a focus on task completion, similar to a machine bureaucracy.

Organic Bureaucracy

An adaptable and flexible organizational structure that allows for responsiveness and change, contrasting with more rigid bureaucracies.