The ratio between the nominal and real GDP is called ____.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. GDP deflator.
The ratio between nominal GDP and real GDP is called the GDP Deflator. It measures the level of prices of all new, domestically produced, final goods and services in an economy. The GDP deflator is used to convert nominal GDP into real GDP, adjusting for inflation or deflation. By comparing nominal GDP (which is measured at current market prices) to real GDP (which is adjusted for inflation), the GDP deflator provides insights into changes in the price level and economic inflation.