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Questions and Answers
Which index tends to overstate price changes according to the text?
Which index tends to overstate price changes according to the text?
- Consumer Price Index
- Paasche price index
- Laspeyres price index (correct)
- GDP
What does CPI measure according to the text?
What does CPI measure according to the text?
- Prices of imported goods and services bought by consumers
- Value of all goods and services bought by consumers (correct)
- Value of all goods and services produced in the economy
- Prices of all goods and services produced in the economy
What is a key difference between GDP and CPI as described in the text?
What is a key difference between GDP and CPI as described in the text?
- GDP uses fixed prices while CPI allows changes in prices
- CPI considers imported goods and services while GDP does not (correct)
- GDP measures prices of all goods and services bought by consumers
- CPI measures value of all goods and services produced in the economy
Which index uses base-period quantities for calculation according to the text?
Which index uses base-period quantities for calculation according to the text?
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What is a characteristic of Paasche price index mentioned in the text?
What is a characteristic of Paasche price index mentioned in the text?
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What does GDP measure according to the text?
What does GDP measure according to the text?
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Why can GDP measure both total income and total expenditure simultaneously?
Why can GDP measure both total income and total expenditure simultaneously?
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What is the difference between Nominal GDP and Real GDP?
What is the difference between Nominal GDP and Real GDP?
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How is GDP defined according to the text?
How is GDP defined according to the text?
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What does Real GDP reflect?
What does Real GDP reflect?
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