In official government statistics, the GDP deflator is actually calculated using:
A) a method called a chain-weighted index.
B) the ratio of nominal GDP to real GDP from the year before it.
C) a simpler approach, so the results are easily comparable.
D) the value of a market basket that households typically purchase.

Question

Quizplus · Accepted Answer

In official government statistics, the GDP deflator is actually calculated using a method called a chain-weighted index. This method accounts for changes in prices and weights of goods and services over time, resulting in a more accurate measure of inflation than simply comparing nominal GDP to real GDP from the year before it.

In Official Government Statistics, the GDP Deflator Is Actually Calculated