Bureau of Economic Analysis data show that with base year 2005 = 100, the GDP price index was 109.7 in the second quarter of 2009. In that same quarter, the PCEPI was 108.8. Given the further information that the prices of capital goods (investment) and foreign traded goods (exports and imports) increased at a slower pace than the prices of consumption goods and services, how would you explain the difference in the GDP price index and PCEPI measures of inflation? Choose the correct statement. A.The prices of government goods and services increased at the same pace as the prices of consumption goods. B.The prices of consumption goods increased at a faster pace than the prices of government goods. C.The prices of exports increased at the same pace as the prices of imports. D.The prices of government goods and services increased at a faster pace than the prices of consumption goods. E.The prices of capital goods and foreign traded goods increased at a faster pace than the prices of government goods.

Gross Domestic Price:It is the primary indicator which shows the health of an economy. It depicts…

Answered: Bureau of Economic Analysis data show…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Bureau of Economic Analysis data show that with base year 2005 = 100, the GDP price index was 109.7 in the second quarter of 2009. In that same quarter, the PCEPI was 108.8.

Given the further information that the prices of capital goods (investment) and foreign traded goods (exports and imports) increased at a slower pace than the prices of consumption goods and services, how would you explain the difference in the GDP price index and PCEPI measures of inflation?

Choose the correct statement.

The prices of government goods and services increased at the same pace as the prices of consumption goods.

The prices of consumption goods increased at a faster pace than the prices of government goods.

The prices of exports increased at the same pace as the prices of imports.

The prices of government goods and services increased at a faster pace than the prices of consumption goods.

The prices of capital goods and foreign traded goods increased at a faster pace than the prices of government goods.

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