How Do the GDP Deflator and the Consumer Price Index

question 17

Multiple Choice

How do the GDP deflator and the consumer price index compare to each other?

• 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, but 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, but 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.

---

Definitions:

Purchase

The act of buying goods or services.

Items

Objects, products, or goods that are listed or mentioned, typically in the context of shopping, inventory, or collections.

Gauge Copper

A measurement of the thickness or diameter of copper wire, indicating its current-carrying capacity.

Electrical Contractor

A business or individual specializing in designing, installing, and maintaining electrical systems in buildings.