A Japanese Automobile Company Produces Cars in Canada, Some of Which

Multiple Choice

A Japanese automobile company produces cars in Canada, some of which are exported to other nations. If the price of these cars increases, what happens to the GDP deflator and the CPI?

A) The GDP deflator and the CPI will both increase.
B) The GDP deflator will increase, but the CPI will be unchanged.
C) The GDP deflator will be unchanged, but the CPI will increase.
D) The GDP deflator and the CPI will both be unchanged.