Question

The GDP deflator for this year is calculated by dividing the using by the using and multiplying by 100. However, the CPI reflects only the prices of all goods and services . Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply.

Answer 1

Hello. You forgot to provide the answer options. The options are:

"A) value of all goods and services produced in the economy this year  B) This years prices  C) value of all foods and services produced in the economy this year  D) the base year's prices  E) bought by consumers"

Answer:

The GDP deflator for this year is calculated by dividing the  value of all goods and services produced in the economy this year using this years prices by the value of all foods and services produced in the economy this year using the base year's prices and multiplying by 100. However, the CPI reflects only the prices of all goods and services bought by consumers.

Explanation:

GDP deflator is an economic term that means "implicit price deflator". This term is defined as the price measure for any and all goods and services produced within the country, in the year in question. GDP, in turn, is directly related to this, since it represents the monetary value that each of these goods and services produced during that same year.

The GDP deflator is directly related to the CPI, which is another economic term intended to represent the consumer price index. Through the CPI, the GDP deflator is able to measure the inflation or deflation that occurred in the national economic sector for a given year.

The GDP deflator for this year is calculated by dividing the  value of all goods and services produced in the economy this year using this years prices by the value of all foods and services produced in the economy this year using the base year's prices and multiplying by 100. However, the CPI reflects only the prices of all goods and services bought by consumers.