WBCS.LIVE practice question

Which economic indicator is calculated by dividing Nominal GDP by Real GDP and multiplying by 100?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Consumer Price Index
  2. Wholesale Price Index
  3. GDP Deflator
  4. Purchasing Power Parity

Correct answer and explanation

Correct answer: GDP Deflator

Explanation: āœ… Correct Answer: C) GDP Deflator šŸ“š Explanation: The GDP deflator is a comprehensive measure of general price inflation within an economy. It is calculated by dividing Nominal GDP by Real GDP and then multiplying by 100. Unlike the Consumer Price Index (CPI), the GDP deflator covers all goods and services produced domestically, making it a broader indicator of price changes.