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:

Utility

In economics, a measure of satisfaction or enjoyment obtained from consuming goods and services.

Hotel Room

A private room in a hotel, inn, or similar establishment where travelers can sleep, rest, and utilize basic amenities for a temporary period.

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, representing equal levels of satisfaction.

Enchiladas

A traditional Mexican dish consisting of corn tortillas rolled around a filling and covered with a chili pepper sauce.