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Which of the following is called GDP Def...

Which of the following is called GDP Deflator?

A

Ratio of nominal to real GDP

B

Ratio of nominal to real GNP

C

Ratio of nominal to real CPI

D

Ratio of real to nominal GNP

Text Solution

Verified by Experts

The correct Answer is:
A
The Gross Domestic Product (GDP) deflator is a measure of general price inflation. It is calculated by dividing nominal GDP by real GDP and then multiplying by 100. Nominal GDP is the market value of goods and services produced in an economy, unadjusted for inflation (It is the GDP measured at current prices). Real GDP is nominal GDP, adjusted for inflation to reflect changes in real output (It is the GDP measured at constant prices).
GDP Deflator `=("Nominal GDP")/("Real GDP")xx100`
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