Question

1) True or False. If False, supply a reason. a) The GDP deflator ensures that we are comparing the same quantity of goods and services. b) A higher GDP always means a greater level of well-being c) We need the exchange rate because different countries have different populations. d) The value of the deflator for the base year in percentage terms is 100. e) Contractual rights reduce the risks of our transactions

Answer 1

11) This statement isshabe as unleh TPI it's not based on the fixed ban of goods and services. This basket changes from one year to the nent based on the change in people's Preferences. (6) This statement is also sabe as higher GOP does not ensure well being of all people in the society. The higher EDP does not essure equitable distribution ef wealth. It is highly possible that the wealth is accummilated in the hands of a few and not in the hands of the poor. Hence for well being THOI is more comprehesware that is used.

An exchange fale the sale atach one currenoses to be exchange in the c gight, Therefore, it has thing to da coda the population Gre country hao wa Charpenison to the other Hence the statement is 1 Sahel @ this statement is ue] The reason being the bax yan's nominal applis caual to the Real GDP Nominal GDP Hore, GOP deflaton - Roal 60l Real GDP 100 Real GDP (As for box geen Nom Nappar Real 100 Therefore, the deflator for taxe year in percentage tenno al 100)

This statement (e) is true These contractual rights are those rights. of which is valid for both the parties entering into that contract B As, the terms of the contract is monitored by both and agreed by both the pontics, cheat it ensures. teases transparency It cases of any bransaction of any good on Services both the party agrees on the terrors and conditions thereby reducing the risk of our transaction

We know that, GDP deflator = Nominal GDP x200 Real GDP Therefore, (1) For year (1980) GDP dellator- Norinal GDP Real GDP lalapp. X 100 Real GDP 2862.9 x100 48.3 = [1927.3. (2) For year [1985] GDP deflaton = 4396.7 x 100 6977:0 = 162.3]

(3) For year (1990) Nominal GDP = - GOP deflator X GDP deflator X Real GDP 100 72.7 x 8225 100 = [5979:6] (a) For year (1995) 1 Real GDP – Nominal GDPX 100 GDP deflator 7669 8100 81.7 19380.66] 2000 PONU (5) For year [2000] Gop deflator - 10289.7 x 100