Exhibit 18-6
Multiple Choice
-According to the data in Exhibit 18-6, using 2016 as the base year, the GDP price deflator in 2017 was

Question

Exhibit 18-6
  Multiple Choice
-According to the data in Exhibit 18-6, using 2016 as the base year, the GDP price deflator in 2017 was

Quizplus · Accepted Answer

To calculate the GDP price deflator, we need to take the nominal GDP of the current year (in this case, 2017) divided by the real GDP of the current year, both multiplied by 100 to get a percentage. Therefore, GDP price deflator in 2017 = (Nominal GDP 2017/Real GDP 2017) x100. We can see from the exhibit that the nominal GDP in 2017 was $2,100 billion and the real GDP in 2017 was $1,632.8 billion (both expressed in 2016 dollars), plugging these values into the formula above we get GDP price deflator in 2017 = (2,100/1,632.8) x 100 = 128.6. Rounded to two decimal places, the answer is 1.28.

Exhibit 18-6 Multiple Choice