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Answer to Question #117420 in Macroeconomics for Sanya Mahajan
Question #117420
What will happen to the GDP deflator and CPI of America if the price of steel produced in India and sold to America goes up?
Expert's answer
- An increase in the nominal GDP will result if the price of steel rises causing cost-push inflation.
- The CPI will also rise over a certain period of time since there is inflation
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