Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.
The GDP deflator for this year is calculated by dividing the_using_by theusing_and multiplying by 100. However, the CPI reflects only the prices of all goods and services____. Indicate whether each scenario will affect the GDP deflator or the CPI for the United States.
Shows up in the... GDP
Scenario Deflator CPI
A decrease in the price of a Treewood Equipment feller
buncher, which is a commercial forestry machine made
in the U.S. but not bought by U.S. consumers.
An increase in the price of a Japanese-made television
that is popular among U.S. consumers.

GDP deflator for this year is calculated by dividing the value of all goods and services produced in the economy using this year's prices by the value of all goods and services produced in the economy using the base year's prices. However, the CPI reflects only the prices of all goods and services bought by the consumers.

1. Scenario: A decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S. but not bought by U.S. consumers

Shows up: In the GDP Deflator not CPI

2. Scenario: An increase in the price of a Japanese-made television that is popular among U.S. consumers.

Shows up: In the CPI not GDP Deflator