Write the Formula for Calculating a GDP Deflator Using Only

question 43

Essay

Write the formula for calculating a GDP deflator using only nominal and real GDP.

Analyze compound propositions and their components.

Identify valid arrangements of propositions in distilling an argument.

Understand the use and limitations of categorical propositions in constructing arguments.

Understand the terminology used in logical statements, including connectives and statement variables.

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Definitions:

Required Reserve Ratio

The fraction of deposits that regulators require a bank to hold in reserve and not lend out, in order to ensure bank stability and liquidity.

Excess Reserves

The funds that banks hold over and above the legally mandated minimum to safeguard bank liquidity, which can also be lent out.

Actual Reserves

The funds that a bank has on hand or deposited with the central bank, available for immediate use.

Net Worth

Assets minus liabilities; also called owners’ equity.