Both CPI and the GDP deflator measure the change in the price of goods and services and
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Both CPI and the GDP deflator measure the change in the price of goods and services and tend to change in similar ways over time. In the third quarter of 2018, CPI rose by 1.5% from the previous quarter while the GDP deflator only rose by 0.7% over the same time. Explain what might lead them to rise at different rates using what you know about the differences between CPI and the GDP deflator.
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