If the Price of Used Automobiles Increased Dramatically Relative to All

question 40

Multiple Choice

If the price of used automobiles increased dramatically relative to all other prices,and the demand for all goods remained the same,which of the following would most likely occur?

• A) The GDP price index would decrease less than the CPI.
• B) Both the GDP price index and the CPI would decrease.
• C) The GDP price index would increase more than the CPI.
• D) The CPI would increase more than the GDP price index.
• E) Both the GDP price index and the CPI would increase by the same amount.

---

Definitions:

Latin America

A region in the western hemisphere, comprising countries where Romance languages (primarily Spanish and Portuguese) are predominant, known for its diverse cultures, historical ties to colonialism, and significant natural resources.

Iran Arms Deal

Refers to a controversial arrangement, officially known as the Iran-Contra affair, where the United States secretly facilitated the sale of arms to Iran, which was then under an arms embargo, during the 1980s.

Oliver North

A former United States Marine Corps lieutenant colonel involved in the Iran-Contra affair in the 1980s, which was a political scandal involving arms sales.

Sandinista Government

The government of Nicaragua from 1979 to 1990 led by the Sandinista National Liberation Front, a socialist political party.