2. Alternative price indexes Because there isn\'t one single measure of inflatio
ID: 1161028 • Letter: 2
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2. Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. 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. Shows up in the. GDP Deflator CPI Scenario An increase in the price of a Waterman Industries deep-water reel, which is a commercial fishing product used for deep-sea fishing, made in the U.S., but not bought by U.S. consumers A decrease in the price of a Japanese-made television that is popular among U.S. consumersExplanation / Answer
An increase in the price of a Waterman Industries deep-water reel, which is a commercial fishing product used for deep-sea fishing made in the US, but not bought by U.S. consumers shows up in the GDP deflator because GDP deflator is the measure of all price of goods and services whereas CPI is the measure of only goods bought by consumers and in this case it is not bought by the consumers so it will show up GDP deflator.
A decrease in the price of a Japenese- made telivision that is popular among U.S. consumers which show up in the CPI because it is populare among U.S. consumers.
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