Price indexes:
A) allow us to convert nominal measures of output into real measures of output.
B) let us measure how much real stuff we get for our money.
C) like the CPI or GDP price deflator are used to measure the aggregate price level.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

Price indexes, such as the CPI or GDP price deflator, can be used to measure the aggregate price level, allow us to convert nominal measures of output into real measures of output, and let us measure how much real stuff we get for our money. Therefore, all of these statements are true.

Price Indexes