ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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80
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120
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125
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150
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200
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Detailed explanation-1: -The Consumer Price Index (CPI), a product of the Bureau of Labor Statistics (BLS), is perhaps the most widely used measure of inflation in the United States. The CPI measures the average change over time in the prices paid by urban consumers in the United States for a market basket of goods and services.
Detailed explanation-2: -The GDP deflator in 2015 is 109.09 and in 2016 is 100. The real GDP value is calculated as the product of price of base year and the quantity of the year studied.
Detailed explanation-3: -Nominal GDP = Real GDP x GDP Deflator GDP Deflator: A measurement of the change in price over a duration of time (inflation or deflation). It is calculated as the ratio of Nominal GDP to Real GDP.
Detailed explanation-4: -The price index can then be calculated by dividing the nominal GDP by the real GDP. So if gasoline was $3 per gallon in 2010, then the price index = 3 / 2 × 100 =150.