qHomework Answers
Option A.
- Both CPI and GDP deflator are considered as the two economic indices which are used to measure the changes in price level.
- But they differ in the sense that, GDP deflator is considered as a more broader price index when compared to CPI.
- This is because, the CPI measures the impact of price changes on the cost of typical bundle of goods purchased by households while the GDP deflator measures the changes in average price of market basket of goods included in GDP.
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