The table below contains data for a country. The base year is 2006.

-Refer to the above table.From 2017 to 2019,inflation is ________ and output ________.
A) 5.8 percent; grew
B) 7 percent; grew
C) 9.4 percent; grew
D) 28 percent; did not grow

Question

The table below contains data for a country. The base year is 2006.
 
-Refer to the above table.From 2017 to 2019,inflation is ________ and output ________.
A) 5.8 percent; grew 
B) 7 percent; grew 
C) 9.4 percent; grew 
D) 28 percent; did not grow

Quizplus · Accepted Answer

To calculate the inflation rate, we need to find the percentage increase in the GDP deflator from the base year to each year given. The GDP deflator in 2017 is 108.2, which is a 4.1% increase from the base year (103.9). The GDP deflator in 2018 is 113.7, which is a 8.7% increase from the base year. The GDP deflator in 2019 is 109.9, which is a 5.7% increase from the base year. The average inflation rate from 2017 to 2019 is (4.1+8.7+5.7)/3 = 6.17%, which is closest to 5.8% in choice A). We cannot determine the output growth rate from the data given, so the second part of the answer is inconclusive.

The Table Below Contains Data for a Country