If a Particular Measure of Real GDP Consistently Underestimates Growth

question 28

Multiple Choice

If a particular measure of real GDP consistently underestimates growth in real GDP,then the rate of inflation as measured by the GDP deflator

• A) will consistently be overestimated.
• B) will consistently be underestimated.
• C) will be overestimated and underestimated equally often.
• D) cannot be calculated.
• E) is not a good predictor of the inflation rate in the CPI.

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