The Consumer Price Index and the GDP Deflator Are Two

question 121

Multiple Choice

The consumer price index and the GDP deflator are two alternative measures of the overall price level.Which of the following statements about the two measures is correct?

• A)The two measures are constructed differently,but they always indicate the same inflation rate.
• B)The substitution bias applies equally to both measures.
• C)A change in the price of Korean televisions is reflected in the U.S.consumer price index but not in the U.S.GDP deflator.
• D)All of the above are correct.

---

Definitions:

Varied

Characterized by diversity or difference; not uniform or consistent.

Federal Legislation

Laws passed by the federal government of a country, which apply to all regions and individuals within that country.

Constitutional Rights

Fundamental rights protected by the constitution, including freedom of speech, religion, and the right to fair treatment under the law.

Authoritative Person

An individual recognized or accepted as being in a position of authority or possessing a high level of knowledge and expertise in a particular field.