Which price index comprises the prices of all final goods and services produced within the economy?
A) the consumer price index
B) the GDP inflator
C) the GDP deflator
D) the producer price index

Question

Quizplus · Accepted Answer

The GDP deflator is a price index that captures the prices of all final goods and services produced within the economy. It is used to adjust the nominal GDP (which is the value of all goods and services produced in a given year) to real GDP (which adjusts for inflation and reflects the actual increase in production from one year to the next). The consumer price index (A) measures the prices of a basket of goods and services purchased by households, the GDP inflator (B) is another term for the GDP deflator, and the producer price index (D) measures the prices of goods and services at the wholesale level.

Which Price Index Comprises the Prices of All Final Goods