CBSE 2022 Class 12 Economics Outside Delhi Set 1 (Term 2)

Question : 10 of 19

Marks: +1, -0

Using the following information, calculate and analyse the value of Gross Domestic Product (GDP) deflator:

Year	2014-15	2016-17
Nominal GDP	6.5	9
Real GDP	6.5	7.2

Solution:

GDP Deflator (2014-15)

=\;{\;\text " Nominal GDP "\;}/{\;\text " Real GDP "\;} × 100

\;=\;{6.5}/{6.5} × 100=100

GDP Deflator (2016-17)

=\;{\;\text " Nominal GDP "\;}/{\;\text " Real GDP "\;} × 100

\;=\;{9}/{7.2} × 100=125

Analysis:
In 2016-17, GDP deflator of 125 shows that prices have increased

25 \%

as compared to the base year(2014-15)
It is a warning for the economy to take necessary steps to control inflation.

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