-Refer to Table 5.2. From the data provided when real GDP is 2420 the GDP deflator:
A) is 100.0.
B) is 110.0.
C) is 108.0.
D) cannot be determined.

Question

-Refer to Table 5.2. From the data provided when real GDP is 2420 the GDP deflator:
A) is 100.0. 
B) is 110.0. 
C) is 108.0. 
D) cannot be determined.

Quizplus · Accepted Answer

The GDP deflator is calculated by dividing nominal GDP by real GDP and multiplying by 100. When real GDP is 2420, nominal GDP is 2618.4 (2420 * 1.08). Therefore, the GDP deflator is 108.0 (2618.4 / 2420 * 100).