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:

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The existing state of affairs or the current condition or situation, often referring to a stable or unchanging condition in societal or political contexts.

Bourbon Dynasty

A European royal house of French origin, known for its significant role in the history of France and other countries.