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.

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Definitions:

Income Tax

A tax levied by governments on individuals or entities based on their income or profits.

Reward System

Programs and strategies to recognize and compensate employees for their performance and contribution to the organization.

Performance Measures

Metrics used to evaluate the efficiency, effectiveness, and performance of an organization's activities or employees.

Incentives

Rewards or benefits offered to encourage specific actions or behaviors, particularly in contexts of employment or economics.