How Do You Convert a Price of a Good from an Earlier

question 68

Multiple Choice

How do you convert a price of a good from an earlier time into today's price?

• A) Take the earlier price and divide by today's price, then multiply by the ratio of the consumer price index (CPI) today to that of the CPI in the old year.
• B) Take the earlier price and multiply by the ratio of the earlier gross domestic product (GDP) deflator to today's CPI.
• C) Take today's price and divide by the earlier price in terms of the GDP deflator.
• D) Take the earlier price and multiply by the ratio of today's CPI to the earlier CPI.
• E) Take the earlier price and multiply by the ratio of the earlier CPI to the current CPI.

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