While the CPI _______, the GDP Deflator _______

question 80

Multiple Choice

While the CPI _______, the GDP deflator _______.

• A) tracks changes in prices using a market basket; measures price changes for everything produced in the economy
• B) tracks changes in prices using a market basket; measures price changes for all goods sold in the economy, including goods produced abroad
• C) measures price changes for everything produced in the economy; tracks changes in prices using a market basket
• D) measures price changes for everything produced in the economy; tracks changes in prices using a market basket, including goods produced abroad but purchased domestically

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Definitions:

Economic Value

The worth of a good or service determined by its ability to satisfy needs or wants; measured by the maximum amount a consumer is willing to pay.

Interest Rate

The proportion of a total amount of money that is required as payment for borrowing it, usually described as a yearly percentage rate.

Equivalent

Something that is equal in value, function, amount, or meaning to something else.

Invested

Refers to the allocation of resources, often money, in expectation of generating an income or profit.