The GDP deflator differs from the consumer price index because the GDP deflator:
Correct answer: B. Includes domestically produced final goods
- A. Covers only imported consumer goods
- B. Includes domestically produced final goods
- C. Uses a fixed basket of consumer goods
- D. Measures only wholesale prices
Explanation
The GDP deflator covers prices of domestically produced final goods and services, while the consumer price index focuses on a consumer basket. Imported consumer goods may affect the CPI but are not part of domestic GDP.
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About Economy of Pakistan
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
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