In General,if a Consumer Good Is Produced Domestically and Consumed

question 179

Multiple Choice

In general,if a consumer good is produced domestically and consumed domestically,an increase in its price will have which of the following effects?

• A)The consumer price index will increase relatively more than will the GDP deflator.
• B)The consumer price index and the GDP deflator will increase by the same amount.
• C)The consumer price index will increase relatively less than will the GDP deflator.
• D)One cannot generalize about the increase in the consumer price index relative to the increase in the GDP deflator.

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Definitions:

Net Income

The final amount of profit made by a company once it subtracts all costs and taxes from its overall revenues.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting sold goods.

Current Period

The specific timeframe or duration currently under consideration, often used in financial and operational reporting.

Beginning Inventory

The value of all inventory held by a business at the start of an accounting period, before any purchases or sales have occurred.