You are trying to decide whether to use the GDP deflator or the CPI to calculate the

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You are trying to decide whether to use the GDP deflator or the CPI to calculate the inflation rate in an economy. You will decide to use the CPI if

a: you want to make sure you include all goods and services captured in GDP

b: you are only concerned about prices that firms face

c: you are only concerned about prices consumers face

d: you want to make sure you include all transactions that take place in the economy

Assume that the economy is in a full-employment equilibrium. There is an improvement in overall technology for all firms. The following combination of events are likely to occur

a: output rises, prices fall

b: output falls, prices rise .

c: output rises, prices rise

d: output falls, prices fall

Posted Date: Dec 12, 2021 01:25 PM

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You are trying to decide whether to use the GDP deflator or the CPI to calculate the

Question:

Expert Answer:

1 Option A Explanation GDP deflator measures inflation rate by calculating how much the nominal G... View the full answer

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