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.

Question

Quizplus · Accepted Answer

The GDP deflator includes all domestically produced goods and services, including those purchased by the government, while the CPI only includes goods and services purchased by consumers.

The CPI Differs from the GDP Deflator in That