If the price of regularly purchased imported Belgian chocola

If the price of regularly purchased, imported Belgian chocolate rises, is the CPI or the GDP deflator affected more?

Select one:

a. CPI.

b. Not enough information provided.

c. Both are affected the same.

d. GDP deflator.

Solution

Answer

Option a

This affect CPI, not GDP deflator because the GDP not could for goods produced in aboard but CPI found it because it regularly purchased and it is a part of consumer basket.