If There Is a Reduction in the Price of Large

question 98

Multiple Choice

If there is a reduction in the price of large tractors imported into Canada from Russia,what will happen to the GDP deflator and the consumer price index?

• A) The GDP deflator and the consumer price index will decrease.
• B) The GDP deflator will not change; the consumer price index will decrease.
• C) The GDP deflator will decrease; the consumer price index will not change.
• D) Neither the GDP deflator nor the consumer price index will change.

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Definitions:

Contribution Margin

Contribution Margin represents the portion of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Machine Minutes

A measurement of time expressing the operation of a machine in minutes.

Unlimited Demand

A theoretical concept where there is no upper limit to the quantity of a good or service that consumers wish to purchase, at a zero price point.

Materials Costs

The cost of raw materials used in the production of goods, a major component of the total manufacturing cost.