The GDP deflator of a country in the base year was 100,and it is 130 in the current year.This implies that the prices of final goods and services produced in the country have increased by ________ between the two years.
A) 30 percent
B) 3 percent
C) 10 percent
D) 0.1 percent

Question

Quizplus · Accepted Answer

The GDP deflator measures the price level of all final goods and services produced in a country. Therefore, an increase from 100 to 130 in the GDP deflator indicates a 30% increase in prices between the two years.

The GDP Deflator of a Country in the Base Year