The GDP price index:
A)measures the average price of final goods and services produced in an economy.
B)measures the quality of goods produced in an economy.
C)is derived using the prices of only imported and exported goods and services.
D)is derived using the implicit prices of goods and services produced by the government.
E)measures the value of all intermediate goods and services sold in an economy.

Question

Quizplus · Accepted Answer

The GDP price index (also known as the GDP deflator) measures the average price of all final goods and services produced in an economy. It takes into account both domestic and imported goods and services, and the prices of intermediate goods are excluded to avoid double-counting. This index is used to adjust nominal GDP to real GDP, which provides a more accurate measure of economic growth.

The GDP Price Index