Answer:
a. both the GDP deflator and the consumer price index.
Explanation:
The Gross Domestic Products (GDP) is the measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.
The CPI (Consumer Price Index) overstates the underlying inflation rate because when the price of a commodity rises, consumers tend
to purchase less of it and seek for
substitutes instead. Conversely, as the price of a commodity falls, consumers tend to purchase more
of it.
Hence, an increase in the price of dairy products produced domestically will be reflected in both the GDP deflator and the consumer price index.
