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Consider the following statements regarding GDP deflator.
1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.
2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.
3. When the GDP deflator is negative, it means the economy is experiencing inflation.
Which of the above statements is/are correct?
- a)1, 3
- b)2, 3
- c)1, 2
- d)1, 2, 3
Correct answer is option 'C'. Can you explain this answer?
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Consider the following statements regarding GDP deflator.1. The GDP de...
- In economics, the GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year.
- Like the consumer price index (CPI), the GDP deflator is a measure of price inflation/deflation with respect to a specific base year.
- The GDP deflator is a more comprehensive inflation measure than the CPI index because it isn’t based on a fixed basket of goods.
When GDP deflator is negative, nominal GDP is less than real DP. It means that there is deflation in the economy.
Most Upvoted Answer
Consider the following statements regarding GDP deflator.1. The GDP de...
GDP deflator is an important economic indicator that measures the price level of all new, domestically generated final products and services in a given economy over a year. Let's analyze each statement to determine their correctness:
1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.
- This statement is correct. The GDP deflator is a measure of the average price level of all goods and services produced in an economy. It takes into account the prices of all final goods and services and provides an overall measure of inflation or deflation in the economy.
2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.
- This statement is correct. The Consumer Price Index (CPI) measures the average price change of a fixed basket of goods and services consumed by households, while the GDP deflator measures the price change of all final goods and services produced in the economy. The GDP deflator is more comprehensive as it includes the prices of all products, whereas the CPI focuses on a specific basket of consumer goods.
3. When the GDP deflator is negative, it means the economy is experiencing inflation.
- This statement is incorrect. When the GDP deflator is negative, it indicates deflation, not inflation. Deflation refers to a decrease in the general price level of goods and services over time. It can be an indicator of economic weakness and can potentially lead to a downward spiral in economic activity.
In summary, statement 1 and statement 2 are correct, while statement 3 is incorrect. Therefore, the correct answer is option C (1, 2). The GDP deflator measures the price level of all new, domestically generated final products and services in a given economy over a year, and unlike the CPI, it is not dependent on a fixed basket of goods and services. When the GDP deflator is negative, it indicates deflation, not inflation.
1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.
- This statement is correct. The GDP deflator is a measure of the average price level of all goods and services produced in an economy. It takes into account the prices of all final goods and services and provides an overall measure of inflation or deflation in the economy.
2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.
- This statement is correct. The Consumer Price Index (CPI) measures the average price change of a fixed basket of goods and services consumed by households, while the GDP deflator measures the price change of all final goods and services produced in the economy. The GDP deflator is more comprehensive as it includes the prices of all products, whereas the CPI focuses on a specific basket of consumer goods.
3. When the GDP deflator is negative, it means the economy is experiencing inflation.
- This statement is incorrect. When the GDP deflator is negative, it indicates deflation, not inflation. Deflation refers to a decrease in the general price level of goods and services over time. It can be an indicator of economic weakness and can potentially lead to a downward spiral in economic activity.
In summary, statement 1 and statement 2 are correct, while statement 3 is incorrect. Therefore, the correct answer is option C (1, 2). The GDP deflator measures the price level of all new, domestically generated final products and services in a given economy over a year, and unlike the CPI, it is not dependent on a fixed basket of goods and services. When the GDP deflator is negative, it indicates deflation, not inflation.
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Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer?
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Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer?.
Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer?.
Solutions for Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Current Affairs.
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ample number of questions to practice Consider the following statements regarding GDP deflator.1. The GDP deflator is a metric that measures the price level of all new, domestically generated final products and services in a given economy over a year.2. The GDP deflator, unlike the CPI, is not dependent on a fixed basket of goods and services.3. When the GDP deflator is negative, it means the economy is experiencing inflation.Which of the above statements is/are correct?a)1, 3b)2, 3c)1, 2d)1, 2, 3Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice Current Affairs tests.
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