Ask Question
BusinessBusiness
26 February, 16:51

An increase in the price of imported goods will show up in:

both the CPI and the GDP deflator.

neither the CPI nor the GDP deflator.

the CPI but not in the GDP deflator.

the GDP deflator but not in the CPI.

+3
Answers (2)
  1. 26 February, 16:54
    0
    The correct answer is letter "C": the CPI but not in the GDP deflator.

    Explanation:

    A deflator measures the changes in the value of money in relationship with fluctuations in prices and production. The main difference between the CPI (Consumer Price Index) deflator and the GDP (Gross Domestic Product) deflator is that the first measures the price of goods and services bought by consumers whether imported or not while the second measures the prices of all goods and services produced domestically.

    Thus, if imported products increase in price the CPI deflator will take it into account but not the GDP deflator.
  2. 26 February, 17:01
    0
    Answer: c) The CPI but not in the GDP deflator.

    Explanation: A GDP deflator is a measure of the level of prices of all new, domestically produced finally goods. It is calculated by dividing the nominal GDP by the real GDP.

    A Consumer Price Index on the otherhand measures changes in the price level of a weighted average market basket of consumer goods and services purchased by households

    The major difference between the CPI and GDP deflator is thay they Reflect a different set of prices. The GDP deflator does not include changes in the price of imported goods, while the CPI does not account for changes in the price of exported goods.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “An increase in the price of imported goods will show up in: both the CPI and the GDP deflator. neither the CPI nor the GDP deflator. the ...” 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
A smooth-talking gentleman is looking for investors in his new invention that he says will solve the energy crisis. It is based on perpetual motion, and he claims to be the first person to develop this technology.
Answers (1)
Financial resources are also known as what?
Answers (1)
The market value of Fords' equity, preferred stock, and debt are $ 7 billion, $ 2 billion, and $ 13 billion, respectively. Ford has a beta of 1.7 , the market risk premium is 8 %, and the risk-free rate of interest is 3 %.
Answers (1)
For the year ended December 31, Lopez Company implements an employee bonus program based on company net income, which the employees share equally. Lopezâs bonus expense is computed as $40,777. 1. & 2.
Answers (1)
Which of the following is true of resources? A. Their availability is unlimited. B. They are inputs used to produce goods and services. C. When resource availability is increased, scarcity is eliminated. D. Both b and c.
Answers (1)
New Questions in Business
You've been taking notes for your boss during his meetings with the Senior Executive for the organization.
Answers (1)
Which of the following is a record of a transaction that already happened and was paid for? A. an invoice B. A bill C. A receipt D. A receivable
Answers (2)
A company purchased a two-year fire insurance policy on May 1, 2012. It paid the $2,400 premium in cash on the same date and recorded the entry with a debit to Prepaid Insurance for $2,400.
Answers (1)
Market segments that can be effectively reached and served are said to be
Answers (1)
9. An expenditures incurred on factors of production A, cost B, input C, fixed input D, variable input
Answers (1)
Home » Business » An increase in the price of imported goods will show up in: both the CPI and the GDP deflator. neither the CPI nor the GDP deflator. the CPI but not in the GDP deflator. the GDP deflator but not in the CPI.
Sign Up Forgot Password?