Q11 What is the difference between CPI and ODP deflator tracking?CPI tracks price changes in all consumer gooda and services, while the GDP deflator tracks price changes in allintermediate goods and servicesCPI tracks price changes in a basket of goods and services, while the GDP deflator tracks price changes in allgoods and services.CPI tracks price changes in all consumer goods and services, while the GDP deflator tracks price changes in allcapital goods and servicesCPI tracks price changes in a basket of goods and services, while the GDP deflator tracks price changes in allfinal goods and services.

Inflation is measured by the CPI.

Answered: What is the diference between CPI and…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter19: The Macroeconomic Perspective

Section: Chapter Questions

Problem 28P: Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100...

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Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?
Explain briefly whether each of the following would cause GDP to overstate or understate the degree of change in the broad standard of living. The environment becomes dirtier The crime rate declines A greater variety of goods become available to consumers Infant mortality declines
What is the main reason why GDP deflator and CPI differ from each other? A) CPI includes investments, while GDP deflator doesn’t B) CPI includes durable goods, while GDP deflator doesn’t C) GDP deflator includes exports, but not imports D) CPI includes exports, but not imports
Explain the differences between the Consumer Price Index (CPI) and the GDP deflator
The difference between the formulae used in the computations of CPI and GDP deflatorisa) The CPI uses a Laspeyer Index, whereas the GDP deflator uses a Paasche indexb) The CPI uses a Paasche Index, whereas the GDP deflator uses a Laspeyer indexc) The CPI uses a geometric mean of price relatives, whereas the GDP deflator usesan arithmetic averaged) The CPI uses an arithmetic average of price relatives, whereas the GDP deflatoruses a geometric mean.
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 10 20 50 13 2021 15 30 60 15 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 5.
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 20 50 60 5 2021 21 70 80 6 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 2 karaoke machines and 6 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? Check all that apply. The CPI allows the basket of goods and services to change. The GDP deflator allows the basket of goods and services to change. The inflation rate in 2021 is not the same using the two methods.
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 10 40 30 10 2021 12 60 50 12 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 3 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? 1.The GDP deflator holds the basket of goods and services constant. 2.The inflation rate in 2021 is not the same using the two methods. 3. The CPI allows the basket of goods and services to change.
What is GDP deflator? What for do we use GDP deflator?
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 20 50 60 5 2021 21 70 80 6 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 2 karaoke machines and 6 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? Check all that apply. The GDP deflator holds the basket of goods and services constant. The CPI holds the basket of goods and services constant. The inflation rate in 2021 is the same using the two methods.
Indicate whether each of the following actions or impacts would increase GDPa. An individual purchases bottled water to avoid a contaminated municipal water supply.b. An individual obtains her drinking water from a water fountain at her workplace to avoid a contaminated municipal water supplyc. A homeowner pays a lawn-care company for landscaping servicesd. A neighbor agrees to help a homeowner with landscaping work in exchange for assistance with plumbing worke. A paper company employs workers to plant treesf. An environmental organization provides volunteers to plant trees
What does the Consumer Price Index (CPI) measure? Be specific about what the categories of goods and services that the CPI tracks and measures.

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