If the GDP deflator increases from one year to the next, it can be concluded that the economy has experienced

Question

Quizplus · Accepted Answer

The GDP deflator measures the level of prices of all goods and services included in GDP. If the GDP deflator increases from one year to the next, it means that, on average, the prices of goods and services in the economy have increased. This is a clear indication of inflation, as the purchasing power of money decreases when the price level increases. Therefore, the correct answer is D.

If the GDP Deflator Increases from One Year to the Next