GDP deflator =_______________
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. (nominal GDP/Real GDP) × 100.
The GDP deflator is calculated as:
GDP Deflator = (Nominal GDP / Real GDP) × 100
It measures the level of prices of all new, domestically produced, final goods and services in an economy. By comparing nominal GDP (measured at current market prices) to real GDP (adjusted for inflation), the GDP deflator provides insight into the overall price level and inflation in the economy. It helps convert nominal GDP into real GDP, reflecting changes in price levels over time.