The GDP deflator differs from the consumer price index (CPI) in that the deflator

covers only imported goodsCorrect answerYour answercovers only consumer goodsCorrect answerYour answercovers all domestic output, not a consumer basketCorrect answerYour answeruses wholesale prices of raw materials onlyCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

The deflator includes capital goods and government purchases but not imports.
The CPI tracks the prices of goods consumers buy, wherever they are made.

Concept: Deflator and CPI
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsReal and nominal GDP

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The GDP deflator differs from the consumer price index (CPI) in that the deflator

Explanation