The GDP deflator is the
A) difference between real GDP and nominal GDP multiplied by 100.
B) difference between nominal GDP and real GDP multiplied by 100.
C) ratio of nominal GDP to real GDP multiplied by 100.
D) ratio of real GDP to nominal GDP multiplied by 100.

Question

Quizplus · Accepted Answer

The GDP deflator is a measure of the overall price level in the economy. It is calculated as the ratio of nominal GDP (which includes the value of all goods and services produced at current market prices) to real GDP (which measures the value of all goods and services produced using a constant set of prices, often adjusted for inflation). The resulting number is then multiplied by 100 to translate it into a percentage. Thus, the GDP deflator represents the wholesale price level of all goods and services produced by an economy, regardless of their individual uses.

The GDP Deflator Is the