If the current GDP deflator is 150 and last year's deflator was 125, what is the inflation rate?
A) 0.2%
B) 20%
C) 25%
D) 275%

Question

Quizplus · Accepted Answer

The inflation rate can be found using the following formula: 
Inflation rate = ((current GDP deflator - last year's GDP deflator)/last year's GDP deflator) x 100%

Using the numbers given: 
Inflation rate = ((150-125)/125) x 100% = 20%

Therefore, the correct choice is B.

If the Current GDP Deflator Is 150 and Last Year's