### Understanding the GDP Deflator#### Question:The GDP deflator in year 2 is#### Options:- **a. 177.2**- **b. 125.7**- **c. 95.4**- **d. 105.8**Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.#### Explanation:The GDP deflator is an economic metric that converts output into current prices to remove effects of inflation. It reflects price changes and provides insight into the amount of inflation within the economy. The value is critical for understanding how much prices have increased compared to a base year.To solve this, you'll need to analyze the given options and select the correct GDP deflator for year 2 from the choices provided. For the next 6 questions, suppose that a simple economy produces only four goods and services: cars, homes, cheeseburgers, and cheese. Assume all of the cheese is used in the production of the cheeseburgers. Also, assume that Year 1 is the base year. The information used to answer the next 6 questions is below:| Product | Quantity (Year 1) | Price (Year 1) | Quantity (Year 2) | Price (Year 2) ||---------------|-------------------|----------------|-------------------|----------------|| Cars | 50 | 25 | 100 | 30 || Homes | 10 | 30 | 15 | 50 || Cheeseburgers | 100 | 5 | 150 | 6 || Cheese | 50 | 1 | 75 | 3 |This table highlights the quantities and prices of different products in two consecutive years. It provides a foundation for analyzing economic concepts such as inflation, GDP, and production changes.

In order to calculate the GDP deflator first the nominal and real GDP for year 2 is calculated. GDP…

Answered: The GDP deflator in year 2 is Select an…

The GDP deflator in year 2 is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 177.2 b 125.7 с 95.4 d 105.8

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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