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Suppose a country has a nominal GDP of 100 trillion dollars and a real GDP of 89 trillion dollars. Calculate the GDP deflator for this country. Round to two decimal places.

a.1.12

b.89

c.89

d.112.36

Answer :

The GDP deflator for the country is 112.36, indicating a 12.36% increase in the overall price level compared to the base year. Option (d) is the correct answer.


The GDP deflator measures the inflation rate by comparing the nominal GDP to the real GDP. It is calculated by dividing the nominal GDP by the real GDP and multiplying by 100. In this case, the nominal GDP is $100 trillion and the real GDP is $89 trillion.

Thus, the GDP deflator is (100/89) * 100 = 112.36. This means that the overall price level in the country has increased by 12.36% compared to the base year. Therefore, option (d) is the correct answer.

Learn more about GDP here: brainly.com/question/32775130

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