The CPI, because it assumes a constant shopping basket.
The GDP deflator, because it is based on what is actually produced each year.
The CPI, because it focuses on consumption.
The GDP deflator, because it is more comprehensive.
Total votes: 81
Learning objectives:
Understanding the meaning of the Consumer Price Index.
Understanding the meaning of the GDP deflator.
Understanding how each index is calculated.
Understanding the advantages and disadvantages of each price index.
Understanding the effects of a shock in consumption patterns on the different price indices.
Presentation videos: