Will the CPI and GDP deflator always move together? Explain
What will be an ideal response?
No they will not. Some of the goods included in the GDP deflator (some investment goods) are not included in the CPI. Some of the goods included in the CPI (foreign goods) are not included in the GDP deflator.
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Refer to Table 9-6. Consider the following values of the consumer price index for 1996, 1997, and 1998: The inflation rate for 1997 was equal to
A) 1.2 percent. B) 2.0 percent. C) 2.5 percent. D) 4.0 percent.
It may be argued that theoretically, international capital movements
A) tend to hurt labor in donor countries. B) tend to hurt the donor countries. C) tend to hurt the recipient countries. D) tend to hurt labor in recipient countries. E) increase future production in donor countries.
Banks are prohibited from holding __________ in their portfolio of assets
A) commercial paper B) local government securities C) farm mortgages D) corporate stock
Excess reserves equal
A) total reserves less required reserves. B) required reserves less total reserves. C) total reserves plus required reserves. D) required reserves divided by total reserves.