The GDP deflator does not differ from the CPI in its measurement of inflation in that it:
A. measures the price changes of all goods, not just those in a typical consumer's basket.
B. uses the total quantities that are produced, not the ratio of what a typical consumer might consume.
C. does not include imports, which may have a real effect on the typical consumer's cost of living.
D. is the most widely used measure of price level changes for goods and services for consumers.
D. is the most widely used measure of price level changes for goods and services for consumers.
You might also like to view...
The relationship between the output gap and the cyclical rate of unemployment is known as
A) the Phillips curve. B) the LM curve. C) Murphy's law. D) Okun's law.
The following simple model is used to determine the annual savings of an individual on the basis of his annual income and education.
Savings = ?0 + 
0 Edu + ?1Inc + u
The variable ‘Edu' takes a value of 1 if the person is educated and the variable ‘Inc' measures the income of the individual.
?
?
Refer to the above model. If 
0> 0, _____.
A. uneducated people have higher savings than those who are educated
B. educated people have higher savings than those who are not educated
C. individuals with lower income have higher savings
D. individual with lower income have higher savings
Suppose fiscal policy makers pass a budget that cuts taxes in the current period and are expected to cut taxes in the future. Use the IS-LM model to illustrate graphically and explain the effects of this policy on current output and the current interest rate
What will be an ideal response?
When you purchase the lower-priced store brand bread instead of the more expensive name brand, you are experiencing
A. a fall in total utility. B. diminishing marginal product. C. the income effect. D. the substitution effect.