Assume most athletic apparel bought by u.S. Consumers is imported from other nations. If all else is constant, an increase in the price of foreign-made athletic apparel will cause the u.S.

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14-09-2018
Business

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Assume most athletic apparel bought by u.S. Consumers is imported from other nations. If all else is constant, an increase in the price of foreign-made athletic apparel will cause the u.S.

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pristina pristina · Answer 1 · 2018-09-27T15:40:19+02:00

Answer: c. consumer price index to increase more than the GDP deflator.

Explanation: When most athletic apparel bought by U.S. Consumers are imported from other nations. If all else is constant, an increase in the price of foreign-made athletic apparel will cause the U.S consumer price index to increase more than the GDP deflator. This is because imported goods are not included in the GDP deflator but are included in the Consumer price index.