Place each of the following transactions in one

of the four components of expenditure: con-

sumption, investment, government purchases,

and net exports.

a. Boeing sells an airplane to the Air Force.

b. Boeing sells an airplane to American Airlines.

4. The consumer price index (CPI) measures the price of a fi xed basket of

goods and services purchased by a typical consumer relative to the same

basket in a base year. Like the GDP defl ator, which is the ratio of nominal

GDP to real GDP, the CPI measures the overall level of prices.