Which is the most accurate statement about the GDP deflator and the consumer price index?
A)The GDP deflator compares the price of a fixed basket of goods and services to the price of the basket in the base year,whereas the consumer price index compares the price of currently produced goods and services to the price of the same goods and services in the base year.
B)The consumer price index compares the price of a fixed basket of goods and services to the price of the basket in the base year,whereas the GDP deflator compares the price of currently produced goods and services to the price of the same goods and services in the base year.
C)Both the GDP deflator and the consumer price index compare the price of a fixed basket of goods and services to the price of the basket in the base year.
D)Both the GDP deflator and the consumer price index compare the price of currently produced goods and services to the price of the same goods and services in the base year.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) measures the price of a fixed basket of goods and services over time, while the GDP deflator measures the price of all goods and services produced domestically, comparing current production to the base year.

Which Is the Most Accurate Statement About the GDP Deflator