The indices that are based on a fixed market basket of goods and services are
A) CPI and GDP deflator.
B) PPI and GDP deflator.
C) CPI and PPI.
D) CPI, PPI and GDP deflator.

Question

Quizplus · Accepted Answer

CPI (Consumer Price Index) and PPI (Producer Price Index) are both based on a fixed market basket of goods and services, reflecting the prices from the perspective of consumers and producers, respectively. The GDP deflator, on the other hand, is not based on a fixed basket of goods and services; it changes with the composition of GDP.

The Indices That Are Based on a Fixed Market Basket