Q. 205.0( 2 Votes )

Use the following

Answer :


GDP deflator represents the price inflation in the economy during a particular period of time.


GDP deflator = (Nominal GDP/Real GDP)*100


Real GDP = (Nominal GDP/GDP Deflator)*100


i)



For the year 2014-15, both the nominal GDP and the real GDP is the same. This represents the situation where there is no price inflation in the economy. Thus nominal GDP = real GDP.


ii) GDP deflator represents the price inflation in the economy during a particular period of time.


GDP deflator = (Nominal GDP/Real GDP)*100


Real GDP = (Nominal GDP/GDP Deflator)*100



Yes, for both the years 2015-16 and 2016-17, real GDP is falling below nominal GDP. This depicts the situation of price inflation in the economy. But the intensity of inflation is lesser in 2016-17 as compared to 2015-16.


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