Which of the following exclusively measures the trend in the prices of certain goods and services purchased by a typical household?
A)The GDP deflator
B)Nominal GDP
C)Real GDP
D)The Consumer Price Index
E)Purchasing power parity

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) measures the price level of a basket of goods and services typically consumed by households. It is an indicator of inflation and provides information on the change in the cost of living over time. The other options listed do not exclusively measure the trend in prices of goods and services purchased by a typical household. The GDP deflator measures the average price level of all goods and services produced in the economy, nominal GDP measures the value of goods and services produced in the economy at current prices, real GDP adjusts nominal GDP for changes in prices and thus reflects changes in the volume of output, and purchasing power parity is a theory that compares the prices of a basket of goods and services across different countries to determine exchange rates that would make them equal.

Which of the Following Exclusively Measures the Trend in the Prices