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<div>'''[[Exam%20macroeconomics%20june%202010|Exam Macroeconomics june 2010]]'''</div>< | <div>'''[[Exam%20macroeconomics%20june%202010|Exam Macroeconomics june 2010]]'''</div> | ||
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<div>{'''Question 4''' - What is the difference between the GDP deflator and the Consumer Price Index (CPI) ?}</div><div>- The GDP deflator overestimates inflation and the CPI underestimates inflation due to the sub- stitution bias.</div><div>- The GDP deflator underestimates inflation and the CPI overestimates it due to consumer hete- rogeneity.</div><div>- The GDP deflator excludes the price of exported goods and the CPI includes them.</div><div>+ The GDP deflator excludes the price of imported goods and the CPI includes them. | |||
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