Final answer:
The Consumer Price Index (CPI) is the economic indicator most closely linked to the average person's cost of living, as it measures the price change for goods and services typically purchased by households.
Step-by-step explanation:
Of the economic indicators listed, the Consumer Price Index (CPI) is most directly linked to the average person's cost of living. The CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. This index is used as a measure of inflation and is a good measure of the cost of living as it includes prices of many products that are directly purchased by households.
The Producer Price Index (PPI), the Employment Cost Index, and the GDP deflator are other price indices, but they have different scopes. The PPI measures prices from the perspective of producers, the Employment Cost Index looks at wage inflation, and the GDP deflator includes all components of GDP. While the GDP deflator is a comprehensive measure of inflation in the economy, it does not focus solely on consumer prices and hence is not the best indicator for the cost of living.
To sum up, for judging changes in the cost of living, the CPI is the best price index to use, because it is designed to track the spending patterns of households, and economists sometimes refer to it as the cost-of-living index.