Question

Alternative price indexes 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 GDP deflator for this year is calculated by dividing thevalue of all goods and services produced In the economy In the base year using this years prices by thevalue of all goods and services produced In the economy this year using and multiplying by100. However, the CPI 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.

Answer 1

The gdp deflector for this year is calculated