Which of the Following Statements Is Correct

question 143

Multiple Choice

Which of the following statements is correct?

• A)The consumer price index is a measure of the overall level of prices,whereas the GDP deflator is not a measure of the overall level of prices.
• B)If,in the year 2011,the consumer price index has a value of 123.50,then the inflation rate for 2011 must be 23.50 percent.
• C)Compared to the GDP deflator,the consumer price index is the more common gauge of inflation.
• D)The consumer price index and the GDP deflator reflect the goods and services bought by consumers equally well.

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Definitions:

Pretzels

A type of baked pastry made from dough that is commonly shaped into a knot and often salted.

Budget Constraint

A representation of all the combinations of goods and services that a consumer can afford with a fixed income and prices.

Indifference Curve

A graph representing different bundles of goods between which a consumer is indifferent, showing combinations that give the consumer the same level of satisfaction.

Income

The amount of money or its equivalent received during a period of time in exchange for labor, goods, or services, or as profit on capital.