If you have $4000 and the GDP deflator decreases from 100 to 90
A) the $4000 will buy 10 percent less of the goods and services produced by society.
B) the $4000 will buy 10 percent more of the goods and services produced by society.
C) the value of the $4000 decreases.
D) the value of the $4000 remains constant.

Question

Quizplus · Accepted Answer

The GDP deflator is a measure of the overall price level of goods and services produced in an economy. A decrease in the GDP deflator indicates that the overall price level has decreased, meaning that the same amount of money will buy more goods and services. Therefore, the $4000 will buy 10 percent more of the goods and services produced by society.

If You Have $4000 and the GDP Deflator Decreases from 100