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The GDP Deflator differs from the CPI in that the GDP Deflator

The GDP Deflator differs from the CPI in that the GDP Deflator Correct Answer incorporates current year quantities in its calculations

D The CPI uses base year quantities, is favored by the U.S. government, and is thought to slightly overestimate the inflation rate. Both indexes incorporate both current year and base year prices. The GDP Deflator differs from the CPI in its use of current year quantities in its calculations.

Related Questions

Consider the following statements about the GDP Deflator. 1. GDP deflator is the ratio of nominal GDP to real GDP. 2. GDP deflator indicates the change in the price level between the base year and the current year. 3. While calculating GDP deflator, the volume of production is considered as fixed. Which of statements given above is/are correct?
Consider the following statements with respect to Consumer Price Index and Wholesale Price Index in India: 1. The WPI is calculated for only goods and CPI is calculated for both goods and services.  2. The WPI is published by the Office of the Economic Advisor in the Ministry of Commerce and Industry while the CPI is published by the Central Statistical Office. 3. The WPI is published on a weekly basis for primary articles and fuel and power and is published monthly for the rest of the items, whereas the CPI is released on a monthly basis. 4. The WPI measures inflation in the initial stages of the supply chain whereas the CPI measure inflation in the later stages of the supply chain. Which among the above given statements are correct?
In the following question, out of the four alternatives, select the alternative which best expresses the meaning of idiom/phrase. The CPI and the CPI(M) in Kerala are at daggers drawn after Eldo Abraham, CPI legislator, was hurt in police baton charge during a CPI protest on Tuesday.
The following sentences form a paragraph.They are numbered as P, Q, R and S. These four parts are not given in their proper order. Read the sentences and choose the alternative that arranges them in correct order. P. It is the ratio of the value of goods and services an economy produces in a particular year at current prices to that of prices that prevailed during the base year. Q. The GDP deflator, also called implicit price deflator, is a measure of inflation. R. Since the deflator covers the entire range of goods and services produced in the economy — as against the limited commodity baskets for the wholesale or consumer price indices — it is seen as a more comprehensive measure of inflation. S. This ratio helps show the extent to which the increase in gross domestic product has happened on account of higher prices rather than increase in output.
Assume that we test the performance of two processors, P1 and P2, on a program. We find the following about each: Processor P1 has a CPI of 2 and executes 2 billion instructions per second. Processor P2 has a CPI of 1 and executes 8 billion instructions per second. Which processor has higher performance on this program? (Recall that CPI stands for Cycles Per Instruction.)
Which of the following correctly explains the difference between WPI and CPI inflation? 1. CPI accounts for the services too unlike WPI. 2. CPI measures inflation down to the retail consumer level, unlike WPI. 3. Both indicators can be used for the measurement of inflation. Choose the correct answer using the codes below:
Consider the following statements about GDP Deflator: 1. It is an index number which measures inflation. 2. It is used to get the value of Nominal GDP from Real GDP. Select the correct option from below:
If nominal GDP equals $5,000 and real GDP equals $4,000, then the GDP Deflator equals
If nominal GDP equals $6,000 and the GDP deflator equals 200, then real GDP equals
Suppose a country produces only two goods, pizza and soda. Given the information in the table below, nominal GDP, real GDP, and the GDP deflator in 2005 are (assume 2004 is the base year):