Complete the following statement explaining the difference between the CPI and the GDP deflator. _________ (The...

Complete the following statement explaining the difference between the CPI and the GDP deflator.

_________ (The CPI, The GDP deflator) measures the impact of price changes on the cost of a typical bundle of goods purchased by households, whereas ___________ (the GDP deflator, the CPI) measures the change in the average price of all goods and services included in GDP.

Expert Solution

The CPI measures the impact of price changes on the cost of typical bundle of goods purchased by households.(CPI measures the changes in cost of a fixed basket of goods)

The GDP deflator measures the change in the average price of all goods and services included in GDP. (It helps in understanding the real economic growth)

Rahul Sunny answered 2 years ago

Discuss the difference between GDP deflator and CPI. Why GDP deflator value for Kuwait may not...

Discuss the difference between GDP deflator and CPI. Why GDP deflator value for Kuwait may not be used to reflect the inflation rate in Kuwait? The nominal interest rate (the interest you pay for your financial borrowing) in Sri Lanka is about 13% while in Kuwait it is about 4%. Discuss the possible reasons for the big difference in nominal interest rates in two countries. In the CPI estimation, the basket of goods and services that are consumed by an...

Can you give an example of the difference between the GDP deflator and CPI 1.GDP deflator...

Can you give an example of the difference between the GDP deflator and CPI 1.GDP deflator reflects the prices of all goods produced domescally,whereas CPI reflects the price of all goods bought by consumers And another example of 2.CPI is computed using a fixed basket ,whereas the gdp deflator allows the basket of goods change over time.

Describe the difference between the GDP Deflator and CPI. Be sure to discuss what they measure,...

Describe the difference between the GDP Deflator and CPI. Be sure to discuss what they measure, how one could get an inflation rate from them, and which measure is more relevant to you and why? must be atleast 100 words

Explain the difference between the CPI and GDP price index (Implicit Price Deflator). Which one is...

Explain the difference between the CPI and GDP price index (Implicit Price Deflator). Which one is a better measure of inflation, and why? Use a graph to support your answer.

3. Explain the differences and similarities between the GDP deflator and the CPI. Be thorough in...

3. Explain the differences and similarities between the GDP deflator and the CPI. Be thorough in your answer and write in complete sentences. 4. What is Hyperinflation and what are some reasons it may occur and persist? What is deflation, when does deflation usually occur, and is deflation a good or bad thing? Give examples of when each scenario happened in history as well. Again, be thorough in your answer.

1) Which of the following are included in the CPI, but not the GDP deflator? Select...

1) Which of the following are included in the CPI, but not the GDP deflator? Select one: a. None of the other answers. b. A truck produced in the U.S. and sold at a dealership in California. c. A desk produced in California and sold to a UCSB student. d. Belgian chocolates that are bought by a UCSB student. 2) Chaz has $20 and lives in a city where the average cost of consumption is $10, while Aly has $10...

Year Nominal GDP Economic Growth Workers GDP Deflator Capital Population CPI M1 Inflation (with GDP Deflator)...

Year Nominal GDP Economic Growth Workers GDP Deflator Capital Population CPI M1 Inflation (with GDP Deflator) 2019 $22,000,000 2.10% 100 110 20,000,000 200 300 $4,000,000 1.10% 2069 $384,000,000 2.80% 150 320 60,000,000 300 1200 $40,000,000 2.90% From the numbers in the table, and your last question, what led to the increase in real per capital GDP between 2019 and 2069. Was it an increase in the fraction of the population working, growth in labor productivity, or a combination of both...

Explain the following well: • GDP deflator • CPI • PPI (WPI) • Inflation (and calculation...

Explain the following well: • GDP deflator • CPI • PPI (WPI) • Inflation (and calculation method) • Linkage (formula) among nominal GDP, real GDP, and GDP deflator • Base year. • How do economists calculate the GDP deflator? Knowing the GDP calculator and Nominal GDP, how do they calculate the real GDP figures? • Explain and distinguish clearly the difference between nominal GDP and real GDP. Offer a clear numerical example to contrast the two better. • In the...

Part B. Price Indexes and Inflation The CPI (consumer price index) and PGDP (GDP Deflator, GDP...

Part B. Price Indexes and Inflation The CPI (consumer price index) and PGDP (GDP Deflator, GDP price index) have the following values. Year CPI (1982-84 = 100) PGDP (2012 = 100) 2019 256 112 2020 258 113 The CPI figures are for the month of June. The GDP Deflator figures are for the second quarter of the year. B1. Why is the level of the CPI higher than that of the GDP deflator, that is, in the 250s rather than...

Complete the table. Round your calculations for nominal GDP, real GDP, and GDP deflator values to...

Complete the table. Round your calculations for nominal GDP, real GDP, and GDP deflator values to two decimals and rate calculations to three decimals. Year Nominal GDP Real GDP GDP Deflator Inflation Rate 1 1760.00 90.01 2 2000.00 0.111 3 2300.00 105.60 4 2410.00 2222.22 5 2327.44 112.57

Question