Which of the following would be the best measure of the cost of living?
A)real GDP
B)real GDP per person
C)GDP deflator
D)consumer price index
E)purchasing managers' index

Question

Quizplus · Accepted Answer

The consumer price index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It can be used to calculate the cost of living, as it reflects changes in the prices of goods and services that are typically consumed by households. Real GDP and real GDP per person are measures of the value of goods and services produced within a country's borders, but they do not necessarily reflect changes in the cost of living. The GDP deflator is an index that measures changes in the general price level of all goods and services included in GDP, but it is less directly related to the cost of living than the CPI. The purchasing managers' index (PMI) is a survey-based measure of business activity, and is not directly related to the cost of living.

Which of the Following Would Be the Best Measure of the Cost