The GDP Deflator Is Different Than the CPI in That

question 82

Multiple Choice

The GDP Deflator is different than the CPI in that

• A)the GDP deflator includes everything while the CPI only includes what average people buy.
• B)the GDP deflator doesn't include food and energy prices.
• C)the CPI includes things businesses buy while the GDP deflator does not.
• D)the CPI is chain-based.

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Definitions:

Direct Labor-Hours

The total number of work hours spent by employees who are directly involved in the manufacturing process.

Traditional Costing

An accounting method that allocates overhead costs to products based on a predetermined rate, often labor or machine hours.

Activity-Based Costing

An accounting method that identifies and assigns costs to specific activities, thereby more accurately reflecting the costs of products or services.

Overhead Rate

The total of indirect costs of production compared to a base activity measure, like labor hours, used to assign costs to products.