The GDP deflator:
A) measures the average price for a basket of goods bought by an average consumer.
B) measures the average price received by producers.
C) is the ratio of nominal GDP to real GDP multiplied by 100.
D) is the price index associated with changes in the cost of living to consumers.

Question

Quizplus · Accepted Answer

The GDP deflator is a price index that measures the level of prices of all newly produced, domestically produced, final goods and services in an economy. It is calculated as the ratio of nominal GDP to real GDP multiplied by 100. Therefore, the correct choice is C. Choices A, B, and D are incorrect as they do not accurately describe the GDP deflator.

The GDP Deflator