At the same time, the Reserve Bank of Africa (Africa's central bank) said it would continue to try to stimulate the economy. This stimulus is likely to lead to rising prices for consumer goods, even as the prices of producer goods remain low. How should we expect inflation as measured by CPI and as measured by the GDP deflator to compare to each other in the future in Africa? Why?
At the same time, the Reserve Bank of Africa (Africa's central bank) said it would continue to try to stimulate the economy. This stimulus is likely to lead to rising
How should we expect inflation as measured by CPI and as measured by the
The main difference between the consumer price index and GDP deflator is that the GDP deflator measures the prices of all goods and services produced within the domestic territory of an economy whereas the CPI measures the prices of only goods and services bought by the consumers,. Thus an increase in the price of goods bought by firms or the government will show up in the GDP deflator but not in the CPI.
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