Question

The GDP price index is different from other price indexes because _____.

a. it includes both foreign produced goods and domestically produced goods
b. it is based on a fixed market basket of goods
c. it includes transactions from both the formal economy and the underground economy
d. it is the broadest measure of prices in the economy

Answer 1

Answer:

d. it is the broadest measure of prices in the economy

Explanation:

GDP price index is used to measure price change of consumer goods and services bought. In addition it measures change in price of goods and services bought by businesses, government, and foreign citizens.

It is the broadest measure of prices in the economy because it takes into consideration all goods and services in the economy.

GDP price index for example is different from Consumer Price Index that only measures changes in price for goods and services of consumer goods.