When adjusting nominal GDP for price changes, it is preferable to use the GDP deflator rather than the consumer price index because
a. the GDP deflator is calculated for a narrow market basket of goods, approximating those items included in our measure of consumption expenditures.
b. the GDP deflator calculates changes in the prices of items that more closely approximate those included in GDP.
c. the GDP deflator is always less than the consumer price index, and therefore, it is a more stable index.
d. the GDP deflator is the sum of the consumer price index and the wholesale price index.
B
You might also like to view...
With a decrease in government expenditure we
A) move up along the aggregate demand curve. B) move down along the aggregate demand curve. C) shift the aggregate demand curve to the right. D) shift the aggregate demand curve to the left.
Which of the following is a characteristic of perfect competition?
a. large barriers to entry b. a small number of firms c. firms selling unique goods d. None of the above is correct.