If the GDP deflator in 2017 is 110.5 and the base year is 2016,then the inflation rate in 2017 will be
A)more than 110.5.
B)10.5 percent.
C)less than 110.5.
D)110.5 percent.

Question

Quizplus · Accepted Answer

The GDP deflator is a measure of inflation that reflects the changes in the prices of all goods and services included in GDP. It is calculated as the ratio of nominal GDP to real GDP, multiplied by 100.

In this case, the GDP deflator in 2017 is 110.5, which means that the overall price level in the economy has increased by 10.5% since the base year of 2016. Therefore, the correct answer is B) 10.5 percent.

If the GDP Deflator in 2017 Is 110