Final answer:
The Consumer Price Index (CPI) does not include purchases of imported or used products, while the GDP deflator does account for them. The CPI is based on a basket of goods that represents what the typical consumer buys, making it a good measure of the cost of living for households.
Step-by-step explanation:
The Consumer Price Index (CPI) does not include purchases of imported or used products, while the GDP deflator does account for them. The Consumer Price Index (CPI) does not include purchases of imported or used products, while the GDP deflator does account for them. The CPI is based on a basket of goods that represents what the typical consumer buys, making it a good measure of the cost of living for households.
The CPI is based on a basket of goods that represents what the typical consumer buys, making it a good measure of the cost of living for households. On the other hand, the GDP deflator includes all components of GDP and is a more accurate measure of inflation as it includes the prices of goods and services produced.