The consumer price index (CPI) is computed as the ratio of nominal GDP to real GDP.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) is not computed as the ratio of nominal GDP to real GDP. The CPI is a measure of the average change in prices over time of goods and services consumed by households. It is based on a basket of goods and services that is updated periodically to reflect changing consumption patterns. Real GDP, on the other hand, is a measure of the total output of goods and services produced in an economy adjusted for inflation.

The Consumer Price Index (CPI) Is Computed as the Ratio