Will the CPI and GDP deflator always move together? Explain
What will be an ideal response?
No they will not. Some of the goods included in the GDP deflator (some investment goods) are not included in the CPI. Some of the goods included in the CPI (foreign goods) are not included in the GDP deflator.
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Discretionary fiscal policy
A) may not have desired effects on real GDP because it leads to decreases in aggregate demand. B) may not have desired effects on real GDP because of the time lags. C) would have a larger effect on real GDP if the multiplier was smaller. D) may not have desired effects on real GDP because it leads to increases in aggregate demand.
Private goods are those for which consumption is
A) rival and excludable. B) rival and nonexcludable. C) nonrival and excludable. D) nonrival and nonexcludable.