If the GDP deflator decreases from one year to the next, it can be concluded that the economy has experienced:
A)stagnation.
B)stagflation.
C)inflation.
D)deflation.

Question

If the GDP deflator decreases from one year to the next, it can be concluded that the economy has experienced:
A)​stagnation.
B)​stagflation.
C)​inflation.
D)​deflation.

Quizplus · Accepted Answer

The GDP deflator is a measure of the overall price level in an economy. If it decreases from one year to the next, it means that, on average, prices of goods and services have decreased. This is indicative of deflation, which is a decrease in the general level of prices.

If the GDP Deflator Decreases from One Year to the Next