There Are a Number of Statistics Computed to Measure the Price

question 7

Essay

There are a number of statistics computed to measure the price level, such as the GDP deflator and the CPI. The choice of which of these measures to use depends in many cases on the specific question in which you are interested. For each of the following situations, state whether the CPI or GDP deflator is a more appropriate measure to use and explain why the statistic is preferred.
a. You are interested in looking at the impact of higher prices of imported oil in the overall cost of living.
b. The government is interested in whether increases in defense spending are affecting the price level.
c. An economic consulting firm is investigating the impact on the aggregate price level of more computers and electronic technology used in production.

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Definitions:

Conformity

The act of aligning one's attitudes, beliefs, or behaviors to group norms or expectations.

Minority Of One

A situation where a single individual's opinion, behavior, or belief stands in opposition to that of the larger group.

Ally

A person, group, or nation that is united with another or others for some common purpose or benefit.

Majority Opinion

The judicial opinion agreed to by more than half of the members of a court that sets forth the decision reached in a case.