MACROECON題 急急急!!!

A)
(1) GDP deflator covers all products included in the measure of GDP, so imports are not included. CPI covers a basket of goods a typical local consumer consumes, which includes imports.
(2) GDP deflator covers non-consumption goods as in gross capital formation in GDP. CPI covers only consumer goods.

B)
Government welfare payment has no direct effect on GDP at all since it does not represent any direct measure of production activity but simply a transfer of wealth from government to receipients.

However, if slippage is concerned, welfare payments increase the disposable income of household, which in turn increases its spending. That spending will generate further income of factor owners which creates a multiple of spending. Through multiplier effect, GDP will rise by a multiple of original welfare payments.