The consumer price index (CPI) is not used to convert nominal GDP to real GDP because the CPI calculation has measurement errors that are avoided in the real GDP calculation.the CPI includes prices of imports which consumers buy which are not relevant to GDP.the CPI does not track government spending, business investment or net exports.the CPI has many limitations and tends to underestimate the inflation rateAll of the answers are correct.

Answered: The consumer price index (CPI) is not…

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The consumer price index (CPI) is not used to convert nominal GDP to real GDP because

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter11: Gross Domestic Product

Section: Chapter Questions

Problem 5SQ

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