The GDP deflator is a
A) statistical measure of a weighted average of prices of a specific set of goods and services purchased by wage earners in urban areas.
B) statistical measure of a weighted average of prices of commodities that firms produce and sell.
C) price index measuring the changes in prices of all new goods and services produced in the economy.
D) price index that tracks the price level of commodities that firms purchase from other firms.

Question

Quizplus · Accepted Answer

The GDP deflator is a price index measuring the changes in prices of all new goods and services produced in the economy. It is a measure of the level of prices of all goods and services included in Gross Domestic Product (GDP). Option A refers to the Consumer Price Index (CPI), which measures the changes in prices of a specific set of goods and services purchased by consumers, and option B refers to the Producer Price Index (PPI), which measures the changes in prices of commodities that firms produce and sell. Option D is not a correct definition of the GDP deflator.

The GDP Deflator Is a