When Adjusting Nominal GDP for Price Changes, It Is Preferable

question 102

Multiple Choice

When adjusting nominal GDP for price changes, it is preferable to use the GDP deflator rather than the consumer price index because

• A) the GDP deflator is calculated for a narrow market basket of goods, approximating those items included in our measure of consumption expenditures.
• B) the GDP deflator calculates changes in the prices of items that more closely approximate those included in GDP.
• C) the GDP deflator is always less than the consumer price index, and therefore, it is a more stable index.
• D) the GDP deflator is the sum of the consumer price index and the wholesale price index.

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Definitions:

Due Date

The specific day by which a task, obligation, or payment is expected to be completed or fulfilled.

Gross Collection Ratio

Includes the total payments received by a practice for a specific period of time, not including any write-offs. The gross collection ratio can be calculated by taking the total payments for the specific period divided by the total charges, again without considering write-offs.

Percentage

A portion of a whole expressed as a fraction of 100, used to describe proportions or compare quantities.

Gross Collection Ratio

A financial metric that measures the total amount of revenue collected versus the total amount charged.