Quizzol

QUESTION:

Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.

The CPI for this year is calculated by dividing the using by the using and multiplying by 100. However, the GDP deflator reflects only the prices of all goods and services .

Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply.

Scenario	Shows up in the...
Scenario	GDP Deflator	CPI
An increase in the price of a Smooth Streets Industries pothole puncher, which is commercial construction equipment made in the U.S. but not bought by U.S. consumers
A decrease in the price of a Italian-made furniture that is popular among U.S. consumers

ANSWER:

The CPI for this year is calculated by dividing thecost of a given market basket of goods and services Correct using this year’s prices Correct by thecost of a given market basket of goods and services Correct using the base year’s prices Correct and multiplying by 100. However, the GDP deflator reflects only the prices of all goods and servicesproduced domestically Correct .

Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply.

Scenario	Shows up in the...
Scenario	GDP Deflator	CPI
An increase in the price of a Smooth Streets Industries pothole puncher, which is commercial construction equipment made in the U.S. but not bought by U.S. consumers
A decrease in the price of a Italian-made furniture that is popular among U.S. consumers

Points:

1 / 1

Posted by Cleveland on September 9, 2024