Suppose the CPI increased by 5 percent over each of the last 5 years while the GDP price index increased by 12 percent annually. Which of the following reasons could explain this difference? a. The price of investment goods purchased by businesses increased substantially relative to the prices of all other goods. b. The price of fighter planes dropped due to increased competition in the aerospace industry. c. The price of used goods increased substantially relative to the prices of other goods. d. Import good prices increased relative to domestic good prices.

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Measuring A Nation's Income
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Suppose the CPI increased by 5 percent over each of the last 5 years while the GDP price index increased by 12 percent annually. Which of the following reasons could explain this difference?

  a.

The price of investment goods purchased by businesses increased substantially relative to the prices of all other goods.

  b.

The price of fighter planes dropped due to increased competition in the aerospace industry.

  c.

The price of used goods increased substantially relative to the prices of other goods.

  d.

Import good prices increased relative to domestic good prices.

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