The GDP Deflator Is the Ratio of

question 94

Multiple Choice

The GDP deflator is the ratio of

• A)real GDP to nominal GDP multiplied by 100.
• B)real GDP to the inflation rate multiplied by 100.
• C)nominal GDP to real GDP multiplied by 100.
• D)nominal GDP to the inflation rate multiplied by 100.

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Definitions:

Net Exports

The difference between a country's total value of exports and total value of imports; a positive value indicates a trade surplus, while a negative value indicates a trade deficit.

Real Interest Rate

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to lenders or investors.

Net Capital Outflow

The difference between the domestic country's purchase of foreign assets and the foreign purchases of the domestic country's assets over a specified period, reflecting the flow of capital across borders.

Capital Asset

A long-term asset such as equipment, real estate, or machinery that a company uses in its operations to generate wealth.