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CBSE 2022 Class 12 Economics Outside Delhi Set 1 (Term 2)

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Question : 10 of 19
Marks: +1, -0
Using the following information, calculate and analyse the value of Gross Domestic Product (GDP) deflator:
 Year   2014-15  2016-17
 Nominal GDP  6.5  9
 Real GDP  6.5  7.2
Solution:  
GDP Deflator (2014-15) =Nominal GDPReal GDP×100= \frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100
=6.56.5×100=100= \frac{6.5}{6.5} \times 100 = 100
GDP Deflator (2016-17) =Nominal GDPReal GDP×100= \frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100
=97.2×100=125= \frac{9}{7.2} \times 100 = 125
Analysis:
In 2016-17, GDP deflator of 125 shows that prices have increased 25%25\% as compared to the base year(2014-15)
It is a warning for the economy to take necessary steps to control inflation.
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