Question

What is the GDP deflator in 2018 if 2013 is the base year?

2013		2018
Product	Quantity	Price	Quantity	Price
Camera	100	$10	120	$12
Legal services	50	15	45	20
Books	200	40	210	45

Group of answer choices

106.2

120.3

94.1

114.7

Answer 1

The table is as follows:

	2013		2018
Product	Quantity	Price	Quantity	Price
Camera	100	$10	120	$12
Legal services	50	15	45	20
Books	200	40	210	45

GDP Deflator in 2018 = (Nominal GDP / Real GDP) x 100

Nominal GDP in 2018 = (120 x 12) + (45 x 20) + (210 x 45)

= 1440 + 900 + 9450

= $11790

Real GDP in 2018 = (120 x 10) + (45 x 15) + (210 x 40)

= 1200 + 675 + 8400

= $10275

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Thus, GDP Deflator = (11790 / 10275) x 100 = 114.7

Thus, the correct choice is 114.7