GNP Deflator is represented by which of the following formulae?
GNP Deflator is represented by which of the following formulae?
(a) Nominal GNP/Real GNP × 100
(b) Real GNP/Nominal GNP × 100
(c) Real GNP/Change in Rate of Inflation × 100
(d) Change in Rate of Inflation/Real GNP × 100
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Ans – (a)
Explanation:-
What is GNP Deflator
It is the ratio of Nominal GNP to Real GNP of the Current year.
GNP Deflator = Nominal GNP/Real GNP × 100
To eliminate the effect of price changes and to determine the real change in physical output, we can use ‘GDP Deflator’.
GDP Deflator measures the average level of prices of all the goods and services that make up GDP.
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