For a country like United states explain why the CPI would increase at a faster rate than the GDP deflator during periods of oil and gasoline price increase.

Md Ariful Islam

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

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Problem No. 2 From following date compute (i) Real GDP (ii) GDP deflator (iii) inflation rate Year Nominal GDP Rs. billion CPI 2018-19 54195 228.1 2020-21 61583 251.3

(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%.

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

Answer on Question#37432 - Economics - Macroeconomics The GDP deflator and CPI diverge in a few ways. The GDP deflator includes goods and services produced domestically, while the CPI includes...

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nominal gdp when real gdp is 2,500 and gdp deflator is 140

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

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what is the GDP deflator,and how does it differ from the consumer and producer price indexes?under what circumstances might it be a more useful measure of price than CPI and PPI?

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...

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What will happen to the GDP deflator and CPI of America if the price of steel produced in India and sold to America goes up?

An increase in the nominal GDP will result if the price of steel rises causing cost-push inflation.The CPI will also rise over a certain period of time since there is...

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What will happen to the GDP deflator and CPI of America if the price of steel produced in India and sold to America goes up? Explain properly within 100 words

The GDP deflator measure price change from the perspective of domestic production of good and services and thus pertain to goods and services purchased by consumers, businesses, government, and foreigners,...

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Q. which policy you will use Easy-Monetary policy or Tight-Monetary policy If The CPI and GDP deflator have risen 3 percent in the last six months. Explain in some sentences

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...

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a) Does an increase in the price of imported Belgian chocolate affect the CPI or the GDP deflator more? Why

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...

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Compare GDP deflator with CPI. Which of the two is a better measure of determining price fluctuations in your opinion?

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...

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Suppose a country's CPI increased from 2.1 to 2.3 in the course of 1 year. Use this fact to compute the rate of inflation for that year. Why might the CPI overstate the rate of inflation?

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%

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