If nominal GDP is constant,then the GDP deflator varies inversely with
A)The unemployment rate.
B)Real GDP.
C)COLAs.
D)The CPI.

Name: If nominal GDP is constant,then the GDP deflator varies inversely with A)The unemployment rate. B)Real GDP. C)COLAs. D)The CPI.
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Question

Quizplus · Accepted Answer

The GDP deflator is calculated as (Nominal GDP/Real GDP) x 100. If nominal GDP is constant, an increase in real GDP will decrease the GDP deflator, indicating an inverse relationship.

If Nominal GDP Is Constant,then the GDP Deflator Varies Inversely