In 1979 and 1980,
A)the U.S.inflation rate as measured by the GDP deflator was higher than that measured by the CPI,and the difference was explained by rapidly rising prices of goods exported by the U.S.
B)the U.S.inflation rate as measured by the CPI was higher than that measured by the GDP deflator,and the difference was explained by rapidly rising prices of goods exported by the U.S.
C)the U.S.inflation rate as measured by the GDP deflator was higher than that measured by the CPI,and the difference was explained by rapidly rising oil prices.
D)the U.S.inflation rate as measured by the CPI was higher than that measured by the GDP deflator,and the difference was explained by rapidly rising oil prices.

Question

Quizplus · Accepted Answer

The U.S. inflation rate as measured by the CPI was higher than that measured by the GDP deflator, and the difference was explained by rapidly rising oil prices. This is because the CPI includes oil prices in its basket of goods, while the GDP deflator does not. Therefore, the rapid increase in oil prices during this period led to a higher inflation rate as measured by the CPI.