A country devaluates its currency causing inflation, which index will estimate inflation more in the short run between cpi and gdp deflator?

(i) Real GDP in 2020-21 is:Yr = 61583×228.1/251.3 = 55897.66. (ii) GDP deflator is: Deflator = 61583/55897.66×100 = 110.17.(iii) Inflation rate is 110.17 - 100 = 10.17%.

Nominal GDP=real GDP*deflator/1002500*140/100=3500Nominal GDP=3500

The CPI increases faster because it only accounts for particular consumer goods while the GDP accounts the cost of all goods and services

The GDP deflator is a measure of all goods and services produced in domestic peripheries of a nation. The index is calculated as a ratio of nominal GDP to real GDP...

CPI and GDP deflator are the commonly used price indices in measuring inflation. The rise in CPI and GDP deflator by 3% in the past six months is an indication...

The main difference between CPI and GDP deflator is that the GDP deflator quantifies the costs, everything being equal, and administrations delivered, though the CPI or RPI measures the costs...

The GDP deflator measures the prices of all goods and services produced, whereas the CPI measures the prices of only the goods and services bought by consumers. The GDP deflator gives a different...

The consumer price index includes only final consumer goods, while the deflator includes all final goods and services accounted for in GDP. In addition, the GDP deflator does not have...

ANSWERThe percentage change in the CPI is given by;CPI = CHANGE IN THE CPI \ INITIAL CPI * 100% = (2.3 - 2.1) \ (2.1)* 100% = 9.52%

The worth of the currency depended on the value of its underlying precious metal. A coin was worth its gold or silver content, as it could always be melted down...