An Increase in the Price of Goods Bought by Firms

question 11

Multiple Choice

An increase in the price of goods bought by firms and the government will show up in:

• A) the CPI but not in the GDP deflator.
• B) the GDP deflator but not in the CPI.
• C) both the CPI and the GDP deflator.
• D) neither the CPI nor the GDP deflator.

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Definitions:

Experiments

Empirical procedures carried out in controlled conditions to verify the validity of hypotheses or determine the efficacy of something previously untried.

Random Events

Outcomes or occurrences that are unpredictable and determined entirely by chance.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1, with 1 indicating certainty.

Tree Diagram

A diagram used to show the total number of possible outcomes in a probability experiment.