An index of prices of all domestically produced goods in the economy is the ?
Correct answer: C. GDP deflator
- A. wholesale price index (WPI)
- B. Consumer price index (CPI)
- C. GDP deflator
- D. Producer price index (PPI)
Explanation
The GDP deflator measures the price level of all domestically produced final goods and services relative to a base year. CPI covers a consumer basket, while WPI and PPI have narrower coverage.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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