Question

Nominal GDP Real GDP 2011 $13,195 billion $11,319 billion 2012 $13,841 billion $11,567 billion In 2011, the value of the GDP deflator is (Enter your response rounded to the nearest whole number.) In 2012, the value of the GDP deflator is (Enter your response rounded to the nearest whole number)

Answer 1

The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year

GDP deflator measures the price inflation in the economy.

It is calculated as: (Nominal GDP/ Real GDP)× 100

Given,

In 2011; Nominal GDP = $13,195 billion

Real GDP = $ 11,319 billion

Therefore, GDP deflator (2011) = (13,195/11,319)×100

= 116.5

Round of value = 117

Given, In 2012;

Nominal GDP: $13,841 billion

Real GDP. : $11,567 billion

Therefore, GDP deflator (2012) = (13,841/11567)×100

= 119.65

Round of value = 120