Question

Subaru (a Japanese-owned car maker) produces its Outback model car in South Carolina. The price of pre-owned (used) Subaru Outbacks with between 40,000 and 70,000 miles that are sold by a Subaru dealership should be included in:

Question 5 options:

	The GDP Deflator
	The Consumer Price Index
	Neither the GDP Deflator or the Consumer Price Index
	Both the GDP Deflator and the Consumer Price Index

Answer 1

Option (B).

CPI includes goods purchased by typical households, which includes used goods. But GDP deflator is ratio or nominal to real GDP, and since both measures of GDP exclude used goods, used car sales is not included in GDP deflator.