Question

g Assume the GDP deflator falls from 162 to 157. This means that Group of answer choices the average price level is growing more slowly. nominal GDP is decreasing. the average price level has fallen. real GDP is decreasing.

Answer 1

Answer: Average price level has fallen

Explanation:

The Gross Domestic Product measures the monetary value of all goods produced in a country for a fiscal year. The GDP deflator measure price changes over time so that the current prices can be accurately compared to historical prices.

The GDP deflator measures price inflation and is calculated by dividing the Nominal GDP by the real gdp and then multiplying by 100.A decrease in the GDP price deflator shows that that the increase in the aggregate price level of prices is smaller when compared to the base year. When a GDP deflator falls from 162 to 157, it means that average price level has fallen.