The GDP deflator for a given year is equal to 100 times nominal GDP for that year divided by real GDP for that year expressed in prices of a selected base year.

Question

Quizplus · Accepted Answer

This is the correct formula for calculating the GDP deflator. The GDP deflator measures the overall price level in an economy, taking into account both the prices of final goods and services as well as the prices of intermediate inputs. It is calculated as the ratio of nominal GDP to real GDP, expressed as a percentage, using a base year as a reference point.

The GDP Deflator for a Given Year Is Equal to 100