When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the GDP deflator, the data show that the
A) CPI measure tends to exceed the GDP deflator measure.
B) GDP deflator measure tends to exceed the CPI measure.
C) CPI measure and the GDP deflator measure are equal.
D) CPI measure and GDP deflator measure move in opposite directions.
E) CPI deflator and GDP deflator cannot be compared because they measure prices of different baskets of goods and services.
Answer: A) CPI measure tends to exceed the GDP deflator measure.
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