The GDP deflator is calculated as: MCQ with Answer and Explanation

Question
The GDP deflator is calculated as:
A. Real GDP divided by Nominal GDP multiplied by 100
B. Nominal GDP divided by NNP multiplied by 100
C. Nominal GDP divided by Real GDP multiplied by 100
D. GDP at factor cost divided by GDP at market price multiplied by 100
Answer: Option C
Solution (By JKSSB Mock Tests)
GDP deflator = (Nominal GDP / Real GDP) × 100.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
Which of the following is a characteristic of the 'Classical Dichotomy'?
A. Real and nominal variables are determined separately and money is neutral
B. Only fiscal policy is neutral
C. Real and nominal variables are always interdependent
D. Money affects real output in the long run
Discuss
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Correct Answer: Option A

Explanation:
The classical dichotomy is the proposition that real variables (output, employment, relative prices) are determined independently of nominal variables and that money is neutral in the long run.
This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a characteristic of the 'New Trade Theory' associated with Paul Krugman?
A. Only comparative advantage based on technology differences matters
B. Economies of scale and product differentiation can explain trade even between similar countries
C. Trade is explained only by differences in factor endowments
D. Trade always reduces welfare
Discuss
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Correct Answer: Option B

Explanation:
New Trade Theory emphasises that increasing returns to scale and consumers’ preference for variety can generate trade and gains from trade even between countries with similar factor endowments.
This question belongs to: Economy GK Economy Set 1
Question #3
The 'Gross Value Added' at basic prices for an enterprise equals:
A. sales plus profits
B. output plus taxes
C. output plus subsidies
D. output minus intermediate consumption
Discuss
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Correct Answer: Option D

Explanation:
GVA = output minus intermediate consumption.
This question belongs to: Economy GK Economy Set 1
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