Table 7.2 GDP for Newland
$$\begin{array} { | l | r | c | r | }
\hline & \begin{array} { c }
\text { Nominal GDP(in billions of } \
\text { dollars) }
\end{array} & \text { GDP deflator } & { \text { CPI } } \
\hline 2001 & \$ 5,900 & 120.1 & 128.3 \
\hline 2002 & 6,300 & 123.0 & 131.7 \
\hline 2003 & 6,804 & 126.3 & 136.5 \
\hline
\end{array}$$ Based on Table 7.2,the rate of inflation between 2002 and 2003,using the GDP deflator,was
A)1.62 percent.
B)2.68 percent.
C)4.91 percent.
D)None of the other choices.

Question

Table 7.2 GDP for Newland
$$\begin{array} { | l | r | c | r | } 
\hline & \begin{array} { c } 
\text { Nominal GDP(in billions of } \
\text { dollars) }
\end{array} & \text { GDP deflator } &  { \text { CPI } } \
\hline 2001 & \$ 5,900 & 120.1 & 128.3 \
\hline 2002 & 6,300 & 123.0 & 131.7 \
\hline 2003 & 6,804 & 126.3 & 136.5 \
\hline
\end{array}$$ Based on Table 7.2,the rate of inflation between 2002 and 2003,using the GDP deflator,was
A)1.62 percent.
B)2.68 percent.
C)4.91 percent.
D)None of the other choices.

Quizplus · Accepted Answer

The rate of inflation using the GDP deflator is calculated as $(126.3 - 123.0) / 123.0 \times 100\%$, which equals approximately 2.68 percent.

Table 72 GDP for Newland Based on Table 7