Q.22 If the overall level of prices in the economy goes up, then all of the foll
ID: 1161933 • Letter: Q
Question
Q.22
If the overall level of prices in the economy goes up, then all of the following variables also go up EXCEPT
Nominal GDP
Real GDP
Consumer Price Index
d. GDP Deflator
Q.23
Which of the following events would cause the U.S. GDP deflator to rise while the U.S. CPI remains unchanged?
A foreign clothing company increases the price of the jeans it sells to U.S. consumers.
A U.S. producer increases the price of industrial tractors it sells to other U.S. companies.
A U.S. restaurant increases the prices on its menus.
A foreign producer increases the price of cars it sells to its own foreign customers.
a.Nominal GDP
b.Real GDP
c.Consumer Price Index
d. GDP Deflator
Q.23
Which of the following events would cause the U.S. GDP deflator to rise while the U.S. CPI remains unchanged?
a.A foreign clothing company increases the price of the jeans it sells to U.S. consumers.
b.A U.S. producer increases the price of industrial tractors it sells to other U.S. companies.
c.A U.S. restaurant increases the prices on its menus.
d.A foreign producer increases the price of cars it sells to its own foreign customers.
Explanation / Answer
22) ans is B
Real GDP is the actual goods and services produced within a given time period.
It doesnot change with the change in price. Thus only real effect can change real GDP
23)ans is B
CPI remains same or CPI remains unaffectes becauase it is the index of retail consumer prices and US produces tractor which it sells to other US companies.
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