One of the Differences Between the GDP Deflator and the Consumer

question 68

Multiple Choice

One of the differences between the GDP deflator and the consumer price index is

• A)the GDP deflator includes income earned by American citizens working in foreign countries and the consumer price index is based solely on purchases made in the U.S.
• B)the consumer price index basket of goods is updated constantly by the Bureau of Labor Statistics whereas the GDP deflator is updated only occasionally.
• C)the consumer price index includes items not included in the GDP deflator such as airplanes purchased by the Air Force.
• D)the GDP deflator reflects prices for all goods and services produced domestically and the consumer price index reflects prices for some goods and services bought by consumers.

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Definitions:

Discrepancy

A divergence or difference between two or more items, situations, or values, often leading to a realization of a problem or a gap that needs addressing.

Effective

The degree to which something achieves its intended result, outcome, or goal with a minimum of wasted effort or expense.

Prescriptive Theories

Prescriptive theories offer specific recommendations or guidelines for actions, aiming to produce desired outcomes based on established principles or empirical findings.

Particular Type

A specific category or class with distinct characteristics that distinguish it from others.