The GDP Deflator in Year 2 Is 105,using Year 1

question 89

Multiple Choice

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

• A)5% higher in year 2 than in year 1.
• B)105% higher in year 2 than in year 1.
• C)5% higher in year 1 than in year 2.
• D)105% higher in year 1 than in year 2.

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Definitions:

Market Niche

A specialized segment of the market for a particular kind of product or service, characterized by specific customer needs and preferences that the business aims to fulfill.

First-Mover Advantage

Comes from being first to exploit a niche or enter a market.

Oligopolistic Industry

An industry structure marked by a small number of firms that dominate the market, often resulting in strategic interactions among these firms.

Strategic Behavior

Actions taken by firms or individuals that consider the anticipated reactions or responses of other firms or individuals.