Question

In the mid-1980s in the U.S., oil prices decreased significantly, which should have caused (a) a...

In the mid-1980s in the U.S., oil prices decreased significantly, which should have caused

(a) a larger decrease in the GDP deflator compared to the CPI.

(b) a larger decrease in the CPI compared to the GDP deflator.

(c) an equal decrease in the CPI and GDP deflator.

(d) no change in the CPI and a decrease in the GDP deflator.

(e) none of the above

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Option B.

  • We know that CPI measures the changes in the prices of the goods and services in the market basket purchased by a consumer.
  • While a GDP deflator measures only the price changes of goods and services that are produced domestically within a country.
  • Decline of oil prices in mid 1980s was greatly due a decline in the CPI as compared to GDP deflator.
  • This is because the CPI considers the price changes of each and every item in the basket while the GDP deflator does not.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
____ 26.   If there is a reduction in the price of large tractors imported into Canada...
____ 26.   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. ____...
Please check my answer and give feedback. Thank you:) 1. If the prices of Japanese -...
Please check my answer and give feedback. Thank you:) 1. If the prices of Japanese - made shoes imported into Canada increase, a. Both Canada's GDP deflator and its consumer price index will increase. b. Both Canada's GDP deflator and its consumer price index will decrease. c. Canada's GDP deflator will increase, but its consumer price index remains constant. d. Canada's consumer price index will increase, but its GDP deflator remains constant. answer: d , because CPI is changed with...
6. A positive supply shock causes A) falling average prices. B) decreased real GDP. C) increased...
6. A positive supply shock causes A) falling average prices. B) decreased real GDP. C) increased unemployment. D) stagflation. E) none of the above. 7. An increasing price level and increased unemployment rate most likely come from A) rising input prices. B) higher income taxes. C) lower interest rates. D) increases in the value of the Canadian dollar. E) improvements in technology.
If U.S. Congress imposed an import fee on crude oil, what would happen to the following...
If U.S. Congress imposed an import fee on crude oil, what would happen to the following and explain? a) Would the world demand curve for crude oil: Shift to the right, shift to the left, or stay the same b) World supply curve for crude oil: Shift to the right, shift to the left, or stay the same c) U.S. demand curve for crude oil: Shift to the right, shift to the left, or stay the same d) U.S. supply...
Rising oil prices worry U.S. finance chiefs    ​Tupperware's CFO says rising oil prices would cause the...
Rising oil prices worry U.S. finance chiefs    ​Tupperware's CFO says rising oil prices would cause the company to pay​ $15 million more for resin than it did a year ago. Resin prices are closely tied to the price of​ oil, which peaked at​ $114 a barrel in​ April, 2011.    ​Source:The Wall StreetJournal​, June​ 27, 2011        Suppose that the government puts a price cap on resin at the resin price in 2010.     We would expect a shortage of resin in 2011...
1) Which of the following would be something that would be included in the CPI but...
1) Which of the following would be something that would be included in the CPI but not the GDP deflator? Group of answer choices A) A computer game produced in San Jose and bought by consumers in Texas B) A golf ball produced in Cleveland and bought by consumers in California C) A box of Legos produced in Denmark is bought by consumers in New York D) A large amount of military uniforms are made in South Carolina and bought...
The Sarbanes-Oxley Act, which was enacted in 2002, has: A) increased the number of U.S. firms...
The Sarbanes-Oxley Act, which was enacted in 2002, has: A) increased the number of U.S. firms going public on foreign exchanges. B) increased senior management's involvement in the corporate annual report. C) increased the annual compliance costs of all publicly traded firms in the U.S. D) all of the above. E) none of the above. 7) The market value of a firm's fixed assets: A) in addition to the firm's capital expenditures reflects the true value of a firm. B)...
11. The price index is 200 in 2008. In 2009, the price index is 216. What...
11. The price index is 200 in 2008. In 2009, the price index is 216. What is the inflation rate in 2009? A. 4 percent B. 8 percent C. 16 percent D. 32 percent E. 216 percent 12. Which change in the price index shows the greatest rate of inflation? A. 150 to 160 B. 160 to 170 C. 170 to 180 D. 180 to 190 E. All changes show the same rate of inflation. 13. Which of the following...
30. The oil price shocks of the 1970's were said to be caused by: a. OPEC...
30. The oil price shocks of the 1970's were said to be caused by: a. OPEC b. a loss of worker productivity c. a decline in the money supply d. limitations of technology used in oil extraction 31. Keynesian economics may be associated with which of the following: a. a challenge to laissez-faire doctrine b. the New Deal c. the IS/LM model d. all of the above 32. If the price level increases and workers do not realize this, they...
1) Which of the following people would be counted as unemployed? a) None of those b)...
1) Which of the following people would be counted as unemployed? a) None of those b) A 15 year old actively looking for a summer job c) A prison immate trying to line up a job after his release d) A 60 year old who would like a job but hasn't looked for one in the last year 2) Which of the following DOES NOT contribute to the lower rate of structural unemployment in the United States compared to Western...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT