The price index _____
A) represents the relationship between the economy's price level and aggregate output demanded.
B) shows how the economy's output changes over time.
C) is used to figure out real GDP each year.
D) aggregates output measured in dollars of constant purchasing power.
E) represents the relationship between the economy's price level and real GDP.

Question

Quizplus · Accepted Answer

The price index is used to adjust nominal GDP to calculate real GDP, which reflects the value of goods and services at constant prices, accounting for inflation or deflation.

The Price Index _____