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

The GDP deflator is calculated as:
A. Real GDP divided by Nominal GDP multiplied by 100
B. Nominal GDP divided by Real GDP multiplied by 100
C. Nominal GDP divided by NNP multiplied by 100
D. GDP at factor cost divided by GDP at market price multiplied by 100
Answer: Option B
Solution (By JKSSB Mock Tests)
GDP deflator = (Nominal GDP / Real GDP) × 100.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a feature of the 'Debt-Deflation' theory associated with Irving Fisher?
A. Debt is irrelevant for the business cycle
B. Deflation always reduces the real burden of debt
C. Only inflation causes debt problems
D. Falling prices raise the real value of debt, leading to further declines in spending and prices

Correct Answer: Option D


Explanation:
Fisher’s debt-deflation theory argues that an initial decline in prices increases the real burden of nominal debt, forcing distressed selling and further price declines in a downward spiral.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Tax Deducted at Source' on salary is deducted by:
A. employee
B. RBI
C. employer
D. Income Tax Department

Correct Answer: Option C


Explanation:
Employer deducts TDS on salary.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is NOT a component of Current Account in the Balance of Payments?
A. Trade in services
B. Unilateral transfers
C. Trade in goods
D. Foreign direct investment

Correct Answer: Option D


Explanation:
Foreign direct investment is a component of the Capital Account. Current Account includes merchandise trade, invisibles (services), and unilateral transfers.

This question belongs to: Economy GK Economy Set 1