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      Question

      Which of the following statements is true regarding the

      GDP deflator?
      A It includes only consumer goods. Correct Answer Incorrect Answer
      B It excludes government spending. Correct Answer Incorrect Answer
      C It uses fixed base-year quantities. Correct Answer Incorrect Answer
      D It reflects price changes for all domestically produced goods and services. Correct Answer Incorrect Answer
      E It is the same as the CPI. Correct Answer Incorrect Answer

      Solution

      GDP deflator measures price changes for all domestically produced final goods and services , unlike CPI which covers only consumer goods.

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