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:

Inventory Accounting

Inventory accounting is the process of valuing and tracking physical stock and includes methods such as FIFO (First In, First Out) and LIFO (Last In, First Out).

Merchandise Returns

Merchandise returns are transactions in which customers return previously purchased goods to the seller, usually for a refund or store credit.

Collection Efforts

The process of pursuing payments of debts owed by individuals or businesses.

Receiving Cash

The process involving the collection or receipt of cash in a business transaction.