Asked by Jacqueline Piedra on May 02, 2024
Verified
For a country like the United States, explain why the CPI would increase at a faster rate than the GDP deflator during periods of oil and gasoline price increases.
CPI
Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, as an indicator of inflation or deflation.
GDP Deflator
A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to adjust nominal GDP to calculate real GDP.
- Examine the impact of alterations in prices on inflation and the Consumer Price Index.
- Comprehend the differences between the CPI and GDP deflator in reflecting price changes.
Verified Answer
KC
Learning Objectives
- Examine the impact of alterations in prices on inflation and the Consumer Price Index.
- Comprehend the differences between the CPI and GDP deflator in reflecting price changes.