What Is the Difference Between the Consumer Price Index (CPI)and

question 117

Multiple Choice

What is the difference between the consumer price index (CPI) and the gross domestic product (GDP) deflator?

• A) Under normal circumstances,the CPI is the better measure of the overall price level.
• B) If inflation is high,the CPI is the better measure of the overall price level; if inflation is low or deflation is occurring,the GDP deflator is the better measure.
• C) The GDP deflator is used only during periods of deflation; the rest of the time we use the CPI to measure the overall price level.
• D) If we want to examine how price changes affect the overall economy,the GDP deflator is the better measure.
• E) The CPI must be equal to the GDP deflator because of the "equation of consumer homogeneity."

Differentiate between variables based on their definition and measurement.

Appreciate the role of statistics in research, assessment, and decision-making processes.

Understand the concept and calculation of intelligence quotient.

Recognize the purposes and ethical considerations of counseling assessments.

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Definitions:

Billable Hours

The amount of an employee's work time that can be charged to a client, commonly used in professional services like law and consulting.

Net Income

The profit of a company after all expenses, taxes, and costs have been deducted from total revenue.

Profit Sharing

A compensation scheme where employees receive a portion of the company's profit, in addition to their regular salary.

Capital Balance

The amount of money an owner has invested in a business plus any retained earnings or minus any losses.