The GDP Deflator Does Not Differ from the CPI in Its

question 13

Multiple Choice

The GDP deflator does not differ from the CPI in its measurement of inflation in that it:

• A) measures the price changes of all goods, not just those in a typical consumer's basket.
• B) uses the total quantities that are produced, not the ratio of what a typical consumer might consume.
• C) does not include imports, which may have a real effect on the typical consumer's cost of living.
• D) is the most widely used measure of price level changes for goods and services for consumers.

---

Definitions:

Net Cash

The total amount of cash and cash equivalents a company possesses after subtracting all its cash outflows from its cash inflows.

Operating Activities

Activities that relate to the primary operations of a company, such as selling, general, and administrative activities, as well as the production of goods and services.

Free Cash Flow

The amount of cash a company generates after accounting for capital expenditures needed to maintain or expand the asset base.

Net Income

The total profit or loss of a company after all expenses, including taxes and interest, have been subtracted from revenue.