Question

Please match the descriptions below with the correct price index. Consumer Price Index GDP Deflator Index Producer Price Index 1. A broad price index based on all the components of GDP A price index based on the cost of common inputs for firms 2. A measure of inflation based on the cost of goods that households typically purchase

Answer 1

Answer:

Consumer Price Index - A measure of inflation based on the cost of goods that households typically purchase

GDP Deflator Index -  A broad price index based on all the components of GDP

Producer Price Index - A price index based on the cost of common inputs for firms

Explanation:

All of the listed are common economics price indexes. The Consumer Price Index essentially measures how prices of consumer bought goods change over time. This implies that it's an important inflation detector.

The GDP Deflator Index reflects on the prices of goods and services that are domestically created and produced. In other words, it follows prices of GDP constituent goods/services.

The Producer Price Index tracks the change in prices producers in the domestic country receive for their output.