The 'GDP deflator includes the price changes of all newly produced goods and services while the 'consumer price index' only includes the price changes of some newly produced goods and services.

Question

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The GDP deflator measures the average change in prices of all goods and services produced in an economy, including those used for investment and government spending. In contrast, the consumer price index only measures the price changes of a fixed basket of goods and services consumed by households. Therefore, the GDP deflator provides a broader measure of inflation that takes into account price changes across the entire economy.

The 'GDP Deflator Includes the Price Changes of All Newly