The GDP deflator:
A)includes fewer goods and services than the CPI.
B)generally rises substantially faster than the CPI during inflationary conditions.
C)ignores investment goods and goods produced by the government.
D)is the broadest generally reported measure of inflation.

Question

The GDP deflator:
A)​includes fewer goods and services than the CPI.
B)​generally rises substantially faster than the CPI during inflationary conditions.
C)​ignores investment goods and goods produced by the government.
D)​is the broadest generally reported measure of inflation.

Quizplus · Accepted Answer

The GDP deflator is a broad measure of inflation that includes all goods and services produced domestically, making it the broadest measure of inflation generally reported. Unlike the CPI, which focuses on a basket of goods and services purchased by households, the GDP deflator encompasses the prices of all domestically produced goods and services, including investment goods and government services.

The GDP Deflator