ECONOMICS
INFLATION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
If nominal output is $100 billion dollars while real output is $90 billion dollars then the GDP deflator (Price Index) is
|
|
approximately 100
|
|
|
approximately 110
|
|
|
approximately 111.1
|
|
|
approximately-110
|
Explanation:
Detailed explanation-1: -GDP deflator is a measure of price level in an economy and is measured as a ratio of nominal to real GDP. This means that GDP deflator is calculated as nominal GDP divided by real GDP multiplied by 100.
Detailed explanation-2: -If the GDP deflator is greater than 100, then the economy has seen a positive change in price level since the base year. In other words, the economy has experienced inflation.
Detailed explanation-3: -Nominal GDP = Real GDP x GDP Deflator GDP Deflator: A measurement of the change in price over a duration of time (inflation or deflation). It is calculated as the ratio of Nominal GDP to Real GDP.
There is 1 question to complete.