What will be the GDP deflator in percentage when Nominal GDP is 50,000 crore and Real GDP is 25,000 crore?
Answer & explanation
Correct answer: option 2
The correct answer is Option 2: 200
GDP deflator is basically calculated to eliminate the effect of any price change and calculate the real change in total output. GDP deflator = \(\frac{\text { Nominal GDP}}{\text {Real GDP }}\) * 100
GDP deflator = \(\frac{50,000 }{ 25,000}\) * 100
GDP deflator = 2 * 100 = 200%
It indicates that the price has gone up by 100%