In the period 1950-2011,the inflation rate in the U.S. CPI has
A) varied very little.
B) been less variable than the inflation rate in the GDP price deflator.
C) been more variable than the inflation rate in the GDP price deflator.
D) been substantially equal to the inflation rate in the GDP price deflator every year.

Question

Quizplus · Accepted Answer

The inflation rate in the U.S. CPI has been more variable than the inflation rate in the GDP price deflator. This is because the CPI measures changes in prices of goods and services consumed by households, while the GDP deflator measures changes in prices of all goods and services produced in the economy. The CPI includes items such as housing, healthcare, and education, which tend to have more volatile price changes than items included in the GDP deflator such as business investment goods and government services.

In the Period 1950-2011,the Inflation Rate in the U