If both nominal and real GDP are ₹2,000 crore, what will the GDP deflator be?
Answer and explanation
Correct answer: 100
The GDP deflator is calculated as (Nominal GDP ÷ Real GDP) × 100. Since both values are ₹2,000 crore, the ratio is 2,000 ÷ 2,000 = 1. Multiplying by 100 gives a deflator of 100, so option B is correct. A deflator of 100 means the measured price level equals the base-year price level. Values above or below 100 would indicate higher or lower prices, respectively.
Frequently asked questions
What is the correct answer to this question?
100
Why is this the correct answer?
The GDP deflator is calculated as (Nominal GDP ÷ Real GDP) × 100. Since both values are ₹2,000 crore, the ratio is 2,000 ÷ 2,000 = 1. Multiplying by 100 gives a deflator of 100, so option B is correct. A deflator of 100 means the measured price level equals the base-year price level. Values above or below 100 would indicate higher or lower prices, respectively.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP Deflator.
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