The following table shows production and prices in 2019 and 2020. Use 2019 as the base year for any relevant calculations. Year Good Price per unit Production (units) 2019 Guns $1,000 10,000 2019 Butter $100 5,000 2020 Guns $500 20,000 2020 Butter $200 5,000 12. What is the GDP deflator in 2020? (A) 537. (B) 186. (C) 18.6. (D) 53.7.

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 The following table shows production and prices in 2019 and 2020. Use 2019
as the base year for any relevant calculations.
Year Good Price per unit Production (units)
2019 Guns $1,000 10,000
2019 Butter $100 5,000
2020 Guns $500 20,000
2020 Butter $200 5,000

12. What is the GDP deflator in 2020?
(A) 537.
(B) 186.
(C) 18.6.
(D) 53.7.

 

Expert Solution
Basic concept

# During a fiscal year, GDP deflator calculates the effect of Inflation during that year on the prevailing level of GDP. The formula for GDP deflator is given as:-

GDP deflator = { Nominal GDP / Real GDP } * 100

 

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