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 CPI for this year is calculated by dividing the using by the using and multiplying by 100. However, the GDP deflator reflects only the prices of all goods and services .

Indicate whether the price change described in each scenario may affect the GDP deflator or the CPI for the United States.

a. A decrease in the price of a Chinese-made phone that is popular among U. S. consumers.
b. An increase in the price of a Treewood handsaw, a popular chainsaw manufactured by Harvestwood Equipment in Bottleneck Springs, Arkansas.