Statement I: The higher the GDP deflator,the greater the degree of deflation.
Statement II: Real GDP was higher in 1992 than in 1991.

Question

Quizplus · Accepted Answer

Statement I is false because the GDP deflator measures the level of prices in a given year relative to a base year, so a higher GDP deflator does not necessarily indicate deflation. 
Statement II may or may not be true as it depends on the actual data for real GDP in 1991 and 1992. Therefore, we cannot evaluate the truth of statement II based on the given information.

Statement I: the Higher the GDP Deflator,the Greater the Degree