Economists use the price index to eliminate year-to-year changes in GDP due solely to changes in:
A)the exchange rate.
B)the unemployment rate.
C)fiscal spending.
D)consumer demand.
E)the price level.

Question

Quizplus · Accepted Answer

The price index is used to eliminate changes in GDP due solely to changes in the price level. A change in the exchange rate, unemployment rate, or fiscal spending can all impact GDP, but they are not eliminated through the use of a price index. Consumer demand can also impact GDP, but this is not a factor that a price index is designed to account for.

Economists Use the Price Index to Eliminate Year-To-Year Changes in GDP