If the GDP Deflator in 2009 Was 120 Compared to a Value

question 193

Multiple Choice

If the GDP deflator in 2009 was 120 compared to a value of 100 during the 2004 base year, this would indicate that

• A) the inflation rate during 2009 was 20 percent.
• B) the general level of prices during 2009 was 20 percent higher than during 2004.
• C) the inflation rate during 2009 was 120 percent.
• D) real GDP was 20 percent higher in 2009 than 2004.

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Definitions:

Promissory Note

A financial paper embodying a vow by one individual or entity to transfer a stated sum of money to another, either on demand or on a specified forthcoming date.

Simple Interest

Interest calculated on the principal amount of a loan or investment, without compounding over time.

Yield

The income return on an investment, typically expressed as an annual percentage rate based on the investment’s cost, its current market value, or its face value.

Promissory Note

A financial instrument that contains a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.