Author Question: Which of the following observations is false? a. Both CPI and GDP deflator tend to move in the same ... (Read 753 times)

fox · **on:** Jun 30, 2018

Which of the following observations is false?
a. Both CPI and GDP deflator tend to move in the same direction.
b. GDP deflator tends to be much more volatile than CPI.
c. Both CPI and GDP deflator probably overstate the inflation rate.
d. both a. and c. are false.

Question 2

If the price index is now 120, it means:
a. prices are 120 percent higher than in the base year.
b. prices are 20 percent higher than in the base year.
c. prices are 1.2 percent higher than in the base year.
d. nominal GDP will be less than real GDP.