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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 the However, the CPI reflects only the prices of all goods and services using using Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Scenario An increase in the price of a South Korean-made coffee maker that is popular among U.S. consumers A decrease 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 by the and multiplying by 100. Shows up in the... GDP Deflator CPI

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 the However, the CPI reflects only the prices of all goods and services using using Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Scenario An increase in the price of a South Korean-made coffee maker that is popular among U.S. consumers A decrease 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 by the and multiplying by 100. Shows up in the... GDP Deflator CPI

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Measuring A Nation's Income
Section: Chapter Questions
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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 the However, the CPI reflects only the prices of all goods and services using using Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Scenario An increase in the price of a South Korean-made coffee maker that is popular among U.S. consumers A decrease 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 by the and multiplying by 100. Shows up in the... GDP Deflator CPI U
Transcribed Image Text: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 the However, the CPI reflects only the prices of all goods and services using using Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Scenario An increase in the price of a South Korean-made coffee maker that is popular among U.S. consumers A decrease 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 by the and multiplying by 100. Shows up in the... GDP Deflator CPI U
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Step 1

GDP and CPI:

In economics, GDP in full form is Gross Domestic Product and measures the value of output manufactured in the United States. CPI's full form is Consumer Price Index and estimates inflation, a change in the general price level. 

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