If you have $10,000 and the Gross Domestic Product (GDP) deflator increases from 100 to 110, then
A) the $10,000 will buy 10 percent less of the goods and services produced by society.
B) the $10,000 will buy 10 percent more of the goods and services produced by society.
C) the value of the $10,000 increases.
D) you will be able to buy fewer goods, but the real value of those goods will increase.

Question

Quizplus · Accepted Answer

An increase in the GDP deflator means that prices for goods and services have increased. Therefore, the value of $10,000 will decrease and will be able to buy 10 percent less of the goods and services produced by society.

If You Have $10,000 and the Gross Domestic Product (GDP)