Asked by Jonas Hauser on Apr 28, 2024
Verified
The group of goods and services used to compute the GDP deflator changes automatically over time, but the group of goods and services used to compute the CPI does not.
GDP Deflator
An indicator of the price level for all newly produced, domestic, final goods and services within an economy.
CPI
It calculates the mean fluctuation in prices for a variety of consumer items and services that urban dwellers purchase, known as the Consumer Price Index.
- Evaluate the distinctions and commonalities between the GDP deflator and the Consumer Price Index.
- Acknowledge the process by which the Bureau of Labor Statistics calculates and updates the Consumer Price Index.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
True
Explanation :
The GDP deflator reflects the prices of all goods and services produced domestically and its basket changes with the production pattern, whereas the CPI measures the prices of a fixed basket of consumer goods and services, which does not change automatically over time.
Learning Objectives
- Evaluate the distinctions and commonalities between the GDP deflator and the Consumer Price Index.
- Acknowledge the process by which the Bureau of Labor Statistics calculates and updates the Consumer Price Index.