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Lumière sur/exam macro june 2010 q4

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Exam Macroeconomics june 2010




  

Question 4 - What is the difference between the GDP deflator and the Consumer Price Index (CPI) ?

The GDP deflator overestimates inflation and the CPI underestimates inflation due to the sub- stitution bias.
The GDP deflator underestimates inflation and the CPI overestimates it due to consumer hete- rogeneity.
The GDP deflator excludes the price of exported goods and the CPI includes them.
The GDP deflator excludes the price of imported goods and the CPI includes them.