What does a price index reflect? 1) Movement in the average level of prices 2) The total economic output of a country 3) Changes in the GDP 4) The balance of trade
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Step 1: A price index is a measure of the average change in prices over time. Show more…
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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 1) ________ a. Value of all goods and services produced in the economy in the base year. b. Value of all goods and services produced in the economy this year. c. cost of a given market basket of goods and services using 2) ______ a. the base year's prices b. this year's prices by the 3) ________ a. Value of all goods and services produced in the economy in the base year b. Value of all goods and services produced in the economy this year c. cost of a given market basket of goods and services using 4) ______ a. the base year's prices b. this year's prices the CPI reflects only the prices of all goods and services 5) _______ a. produced domestically b. bought by consumers Which does an increase in the price of a Chinese-made car that is popular among U.S. consumers show up in? a. GDP Deflator b. CPI
Azat N.
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 1) ________ (A) Value of all goods and services produced in the economy in the base year (B) Value of all goods and services produced in the economy this year (C) cost of a given market basket of goods and services using 2) ______ (A) the base year's prices (B) this year's prices by the 3) ________ A) Value of all goods and services produced in the economy in the base year (B) Value of all goods and services produced in the economy this year (C) cost of a given market basket of goods and services using 4) ______ (A) the base year's prices (B) this year's prices the CPI reflects only the prices of all goods and services 5) _______ (A) produced domestically (B)bought by consumers Which does an increase in the price of a Chinese-made car that is popular among U.S. consumers show up in? (a) GDP Deflator (b) CPI Which does a decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine that cuts and stacks trees show up in? (a) GDP Deflator (b) CPI
QUESTION 4 Inflation means: Specific prices are rising and relative prices are falling: b. Relative prices are rising but it is not certain what is happening to average prices. Both relative prices and average prices are rising: d. Average prices are rising but it is not certain what is happening to relative prices.
Majid B.
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