Is it possible to have a GDP deflator of less than 100?
A) Yes; this would indicate a year when prices were lower than in the base year.
B) Yes; this would indicate a year when output was lower than in the base year.
C) No; it is mathematically impossible for the deflator to be less than 100.
D) Yes; this would indicate a year when prices were lower than in the previous year.

Question

Quizplus · Accepted Answer

A GDP deflator of less than 100 indicates that prices were lower in the current year than in the base year. This can happen if there is deflation, which is a decrease in the overall level of prices.

Is It Possible to Have a GDP Deflator of Less