The CPI is more commonly used as a gauge of inflation than the GDP deflator is because the
A)CPI is easier to measure.
B)CPI includes more goods and services that the GDP deflator does.
C)CPI better reflects the goods and services bought by consumers.
D)GDP deflator cannot be used to gauge inflation.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) is more commonly used as a gauge of inflation than the GDP deflator because it better reflects the goods and services bought by consumers. The CPI specifically measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, making it a more direct measure of the inflation experience by consumers.

The CPI Is More Commonly Used as a Gauge of Inflation