f the nominal GDP = $352b and real GDP = $320b, what is the value of the GDP deflator?Multiple choice question.–9%1109110%
Question
If the nominal GDP = 320b, what is the value of the GDP deflator?
Multiple choice question:
- 9%
- 110%
- 9110%
Solution
The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy.
Here's how you calculate it:
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You start with the formula for the GDP deflator which is: GDP Deflator = (Nominal GDP / Real GDP) x 100
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You plug in the given values: (352 / 320) x 100
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You do the division: 1.1
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You multiply by 100 to get the percentage: 110
So, the GDP deflator is 110. The correct answer is 110%.
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