The CPI is more commonly used as a gauge of inflation than the GDP deflator is because
A)the CPI is easier to measure.
B)the CPI is calculated more often than the GDP deflator is.
C)the CPI better reflects the goods and services bought by consumers.
D)the GDP deflator cannot be used to gauge inflation.

Question

Quizplus · Accepted Answer

The CPI better reflects the goods and services bought by consumers, which makes it a more useful gauge of inflation for policymakers and economists. The GDP deflator includes all goods and services produced in an economy, including those purchased by businesses and the government, which can make it less relevant when assessing changes in the cost of living for households.

The CPI Is More Commonly Used as a Gauge of Inflation