The CPI Differs from the GDP Deflator in That

question 183

Multiple Choice

The CPI differs from the GDP deflator in that

• A)the CPI is an inflation index,while the GDP deflator is a price index.
• B)substitution bias is not a problem with the CPI,but it is a problem with the GDP deflator.
• C)increases in the prices of foreign produced goods that are sold to U.S.consumers show up in the GDP deflator but not in the CPI.
• D)increases in the prices of domestically produced goods that are sold to the U.S.government show up in the GDP deflator but not in the CPI.

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Definitions:

Perceived Inequity

The feeling or belief that fairness has not been maintained in social exchanges or distribution of resources.

Change Outcomes

The process of influencing or altering the results or consequences of actions to achieve a desired goal.

Change Hierarchy

An organizational or systematic way of prioritizing alterations or amendments in processes, behaviors, or structures within a group or system.

Investing More Effort

The action of dedicating additional energy and resources towards achieving a task or goal.