The GDP Deflator Is a Measure of the

question 187

Multiple Choice

The GDP deflator is a measure of the

• A)total production of the economy adjusted for inflation.
• B)total production of the economy unadjusted for inflation.
• C)average level of prices of final goods and services in the economy.
• D)average level of prices of intermediate goods and services in the economy.

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Definitions:

Economies

A system of production, distribution, and consumption of goods and services in an area or country.

Production Possibilities Curve

A graphical representation showing the maximum quantity of goods or services that can be produced with limited resources.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choice.

Comparative Advantage

The ability of a country or entity to produce goods or services at a lower opportunity cost than others, leading to more efficient international trade.