During the mid-1980s, we observed a significant reduction in oil prices. In the United States, we would expect that this reduction in oil prices would cause
A) a larger reduction in the CPI compared to the GDP deflator.
B) an equal reduction in the CPI and GDP deflator.
C) a larger reduction in the GDP deflator compared to the CPI.
D) no change in the CPI and a reduction in the GDP deflator.
A
You might also like to view...
The Acme Company is a perfect competitor in its input markets and its output market. Its average product of labor is 30, the marginal product of labor is 20, the price of labor is $20, and the price of the output is $5
For Acme Company, the marginal revenue product of labor A) is $100. B) is $150. C) is $400. D) is $600. E) cannot be determined with the information provided.
Voluntary exchange increases economic efficiency
A) because neither the buyer nor the seller would agree to a trade unless they both benefit. B) because voluntary exchange only takes place with government permission. C) because it is free and consequently does not cost anything. D) because it allows wealthy individuals to act altruistically and give to the poor.