Explain how the prices of goods and services used in the CPI differ from the prices reflected by GDP deflator
The CPI focuses on goods and services bought by the typical consumer. The GDP deflator reflects the prices of all domestically produced good and services, not foreign-made goods and not just consumer goods.
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Protectionism arises because
a. people misunderstand the benefits of free trade b. trade generally harms some groups in society c. the costs of free trade outweigh the benefits for all groups in society d. the costs of trade for both exporting and importing nations outweigh the benefits e. of a lack of comparative advantage
Adam Smith's notion of the invisible hand served as the foundation of
a. mercantilist thought. b. the philosophy of protectionism. c. the liberal economic thought of the nineteenth century d. the neo-Marxian tradition. e. none of the above.