In 1991,the base year,GDP was 5000.In 1993 the GDP deflator was 106.We may conclude that

A) GDP rose to more than 5000 in 1993.
B) GDP fell to less than 5000 in 1993.
C) GDP remained at 5000 in 1993.
D) None of the choices are correct.

Question

Areli Hernandez · Accepted Answer

Final Answer : D, Explanation :  The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year, relative to a base year. A GDP deflator of 106 in 1993, compared to the base year of 1991, indicates that the overall level of prices has increased by 6% since the base year. However, this information alone does not tell us whether the real GDP (which is adjusted for inflation) has increased, decreased, or remained the same, because the GDP deflator does not directly measure the volume of goods and services produced. It only measures the price level relative to the base year.

In 1991,the base year,GDP was 5000.In 1993 the GDP deflator was 106.We may conclude that

A) GDP rose to more than 5000 in 1993.
B) GDP fell to less than 5000 in 1993.
C) GDP remained at 5000 in 1993.
D) None of the choices are correct.

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Related questions

In 1991,the base year,GDP was 5000.In 1993 the GDP deflator was 106.We may conclude thatA) GDP rose to more than 5000 in 1993.B) GDP fell to less than 5000 in 1993.C) GDP remained at 5000 in 1993.D) None of the choices are correct.

Definitions

Learning Objectives

Learning Objectives

Related questions

In 1991,the base year,GDP was 5000.In 1993 the GDP deflator was 106.We may conclude that

A) GDP rose to more than 5000 in 1993.
B) GDP fell to less than 5000 in 1993.
C) GDP remained at 5000 in 1993.
D) None of the choices are correct.