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

Question 143

Multiple Choice

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


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

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