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Question : 10
Total: 19
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) =
× 100
=
× 100 = 100
GDP Deflator (2016-17)=
× 100
=
× 100 = 125
Analysis:
In 2016-17, GDP deflator of 125 shows that prices have increased25 %
It is a warning for the economy to take necessary steps to control inflation.
GDP Deflator (2016-17)
Analysis:
In 2016-17, GDP deflator of 125 shows that prices have increased
It is a warning for the economy to take necessary steps to control inflation.
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