Refer to Table 13.2 for the following questions.
Table 13.2
$$\begin{array} { | l | c | c | }
\hline & \mathbf { 2 0 1 7 } & \mathbf { 2 0 1 8 } \
\hline \text { Nominal GDP } & \$ 12000 & \$ 13000 \
\hline \text { Real GDP } & \$ 9500 & \$ 10500 \
\hline
\end{array}$$
-Refer to Table 13.2.Calculate the rate of increase in the price level from 2017 to 2018.

Question

Refer to Table 13.2 for the following questions.
Table 13.2
 $$\begin{array} { | l | c | c | } 
\hline & \mathbf { 2 0 1 7 } & \mathbf { 2 0 1 8 } \
\hline \text { Nominal GDP } & \$ 12000 & \$ 13000 \
\hline \text { Real GDP } & \$ 9500 & \$ 10500 \
\hline
\end{array}$$
-Refer to Table 13.2.Calculate the rate of increase in the price level from 2017 to 2018.

Quizplus · Accepted Answer

The rate of increase in the price level is calculated as the percentage change in the nominal GDP deflator. The nominal GDP deflator is calculated as nominal GDP divided by real GDP. In 2017, the nominal GDP deflator was 12000/9500 = 1.2632. In 2018, the nominal GDP deflator was 13000/10500 = 1.2381. The percentage change in the nominal GDP deflator from 2017 to 2018 is (1.2381 - 1.2632)/1.2632 * 100 = -1.6%.

Refer to Table 13 -Refer to Table 13