When the price of Italian wine rises, this change is reflected in the U.S. CPI but not in the U.S. GDP deflator.

Question

Quizplus · Accepted Answer

The U.S. CPI (Consumer Price Index) includes imports like Italian wine, reflecting changes in the prices of all goods and services consumed by households. In contrast, the U.S. GDP deflator measures the prices of all goods and services produced domestically; thus, it does not include imports like Italian wine.

When the Price of Italian Wine Rises, This Change Is