An Increase in the Price of a Domestically Produced Capital

question 6

True/False

An increase in the price of a domestically produced capital good will increase the GDP deflator but not the CPI.

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Definitions:

Rent

Payment, typically made monthly, for the use of land, a building, an apartment, an office, or other property.

Potential Users

Individuals or entities that could use or benefit from a product or service but have not yet done so.

Optimal Combination

The best mix of different factors or elements (such as resources or inputs) to achieve a desired outcome or objective.

Inputs

The resources used in the production process, including labor, raw materials, and capital.