The difference between the formulae used in the computations of CPI and GDP deflator is a) The CPI uses a Laspeyer Index, whereas the GDP deflator uses a Paasche index b) The CPI uses a Paasche Index, whereas the GDP deflator uses a Laspeyer index c) The CPI uses a geometric mean of price relatives, whereas the GDP deflator uses an arithmetic average d) The CPI uses an arithmetic average of price relatives, whereas the GDP deflator uses a geometric mean
The difference between the formulae used in the computations of CPI and GDP deflator is a) The CPI uses a Laspeyer Index, whereas the GDP deflator uses a Paasche index b) The CPI uses a Paasche Index, whereas the GDP deflator uses a Laspeyer index c) The CPI uses a geometric mean of price relatives, whereas the GDP deflator uses an arithmetic average d) The CPI uses an arithmetic average of price relatives, whereas the GDP deflator uses a geometric mean
Chapter5: Gross Domestic Product
Section: Chapter Questions
Problem 12SQP
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The difference between the formulae used in the computations of CPI and GDP deflator
is
a) The CPI uses a Laspeyer Index, whereas the GDP deflator uses a Paasche index
b) The CPI uses a Paasche Index, whereas the GDP deflator uses a Laspeyer index
c) The CPI uses a geometric mean of price relatives, whereas the GDP deflator uses
an arithmetic average
d) The CPI uses an arithmetic average of price relatives, whereas the GDP deflator
uses a geometric mean.
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