Question

The difference between GDP deflator and CPI is that the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by a typical consumer (True/False)

Answer 1

True

Step-by-step explanation:

The GDP is the monetary measure that takes the prices of all final goods and services in a country or region in a specific time period. The GDP deflator uses this concept to know which percentage of growth is due to price increase.

The CPI indicates the average price evolution of an specific basket. This basket contains goods and services that a typical person consumes. For example: food, transportation, medical services, technology and others.