If the GDP deflator is 100 this year,
A)there has been no inflation during the year
B)the price level is the same as it was in the base year
C)the price level is one hundred times what it was in the base year
D)the price level is double what it was in the base year
E)the inflation rate has been 100 percent per year since the base year

Question

Quizplus · Accepted Answer

The GDP deflator is a measure of the overall price level in an economy, and it is calculated as the ratio of nominal GDP to real GDP. When the GDP deflator is 100, it means that the overall price level is the same as it was in the base year. In other words, there has been no inflation (or deflation) since the base year.

If the GDP Deflator Is 100 This Year