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Briefly explain the difference between Consumer Price Index and the GDP Deflator. Describe in your own...

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Economics

Briefly explain the difference between Consumer Price Index andthe GDP Deflator. Describe in your own words; you can include anexposition of the formula of each, if you wish.

Suppose the CPI in 2016, 2017, 2018 and 2019 are 100 and 110,115 and 130 respectively. What is the inflation rate between 2016and 2017, and between 2017 and 2018? How would you interpret thechange in inflation rates between 2016 and 2018?

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4.1 Ratings (774 Votes)
GDP deflator and CPI both used to calculate inflation in the country But they have some difference in calculation GDP deflator considers the goods service which is produce by within the domestic territory    See Answer
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