Ask Question
BusinessBusiness
10 April, 19:12

A Japanese company produces biscuits in Australia and exports all of them to China. If the price of the biscuits increases, then:

the GDP deflator and the CPI both increase

the GDP deflator increases and the CPI is unchanged

the GDP deflator is unchanged and the CPI increases

the GDP deflator and the CPI are unchanged

+5
Answers (1)
  1. 10 April, 19:20
    0
    Answer: Option (B) is correct.

    Explanation:

    Exports is a component of GDP, therefore, GDP deflator also includes exports. Hence, if there is an increase in the price of biscuits that is produced by the Japanese company, then as a result the price of exports increases. Therefore, GDP deflator increases and CPI remains unchanged because CPI is only affected by the changes in price of goods and services that are consumed domestically not internationally.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A Japanese company produces biscuits in Australia and exports all of them to China. If the price of the biscuits increases, then: the GDP ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
4. How has advertising evolved? Do you see the evolution of advertising as a positive or negative advancement? Explain.
Answers (1)
Why are more technology companies based in the San Francisco Bay Area than in any other part of the country? A. The production possibilities frontier has shifted to the left elsewhere. B. Other areas are underutilizing their resources. C.
Answers (1)
In the case where there is a homeowner's association to oversee a common interest community, and there are several common interest communities within one large community, a master association shall:
Answers (1)
Opportunity cost college as opposed to workforce?
Answers (1)
The probability that Mary will win a game is 0.01, so the probability that she will not win is 0.99. If Mary wins, she will be given $200; if she loses, she must pay $18.
Answers (1)
New Questions in Business
Sharp Focus Cameras is facing intense competitive pressure. Top marketing managers are looking for ways to cut costs. They are considering a plan to cut distribution costs by eliminating marketing intermediaries from the channel of distribution.
Answers (1)
Older adults who participated in 20 one-hour video game training sessions with the program lumosity showed reduction in their:
Answers (1)
The total of tools, equipment, machinery, and buildings used to produce goods and services is called supply. True or False
Answers (1)
What percentage of federal revenues is made up of corporate taxes
Answers (1)
F Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will probably
Answers (1)
Home » Business » A Japanese company produces biscuits in Australia and exports all of them to China. If the price of the biscuits increases, then: the GDP deflator and the CPI both increase the GDP deflator increases and the CPI is unchanged the GDP deflator is
Sign Up Forgot Password?