4 If nominal GDP is $10 trillion and real GDP is $8trillion, the GDP deflator is:a. 80, and this indicates that the price level hasdecreased by 20 percent since the base year.b. 80, and this indicates that the price level hasincreased by 80 percent since the base year.c. 125, and this indicates that the price level hasincreased by 25 percent since the base year.d. 125, and this indicates that the price level hasincreased by 125 percent since the base year.

The GDP price deflator estimates the progressions in prices for every one of the goods and services…

Answered: If nominal GDP is $10 trillion and real…

If nominal GDP is $10 trillion and real GDP is $8 trillion, the GDP deflator is: a. 80, and this indicates that the price level has decreased by 20 percent since the base year.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Measuring A Nation's Income

Section: Chapter Questions

Problem 7QR

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Question

If nominal GDP is $10 trillion and real GDP is $8
trillion, the GDP deflator is:
a. 80, and this indicates that the price level has
decreased by 20 percent since the base year.
b. 80, and this indicates that the price level has
increased by 80 percent since the base year.
c. 125, and this indicates that the price level has
increased by 25 percent since the base year.
d. 125, and this indicates that the price level has
increased by 125 percent since the base year.

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