ECONOMICS
INFLATION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
The ____ for a given year is 100 times the ratio of nominal GDP to real GDP that year.
|
|
GDP Deflator
|
|
|
Market Basket
|
|
|
Aggregate Price Level
|
|
|
Inflation Rate
|
Explanation:
Detailed explanation-1: -Since the price index in the base year always has a value of 100 (by definition), nominal and real GDP are always the same in the base year.
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: -Divide the nominal GDP by the GDP deflator and multiply by 100. This will give you the real GDP.
Detailed explanation-4: -The GDP deflator is a good indicator of the changes in the overall price level relative to the base year. To calculate the GDP deflator, divide nominal GDP by real GDP and multiply by 100.
There is 1 question to complete.