Pro: The CPI is the best measure, the GDP deflator has flaws. Justify your answer.
CPI measures the average change over time in the prices paid by urban consumers for a market of consumer goods and services. The CPI is an economic indicator which is used to measure inflation and can also be used as an indicator of the effectiveness of government economic policy. The GDP price deflator is an economic metric that accounts for inflation by converting output measured at current prices into a constant dollar.
Inflation has been described as the process that continuously raises prices or continuously falling value of money. The best measure of inflation depends on the intended use of data. CPI is the best because it adjusts payments to consumers
CPI measures the average change over time in the prices paid by urban consumers for a market of consumer goods and services. The CPI is an economic indicator which is used to measure inflation and can also be used as an indicator of the effectiveness of government economic policy. The GDP price deflator is an economic metric that accounts for inflation by converting output measured at current prices into a constant dollar.
Inflation has been described as the process that continuously raises prices or continuously falling value of money. The best measure of inflation depends on the intended use of data. CPI is the best because it adjusts payments to consumers