The GDP deflator measures the
Correct answer: A. Average price of goods and services produced domestically
- A. Average price of goods and services produced domestically
- B. Average price of imported consumer goods only
- C. Average price of shares traded in an economy
- D. Average quantity of goods exported by a country
Explanation
The GDP deflator compares nominal GDP with real GDP and reflects prices of domestically produced final goods and services. It differs from the consumer price index because the CPI focuses on a consumer basket, including imports.
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About Macroeconomics
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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