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NeTakaya
4 years ago
15

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 in 2010

and 105 in 2009. Between 2009 and 2010, how much did prices increase?
Business
1 answer:
QveST [7]4 years ago
6 0

Answer:

19%

Explanation:

Given that,

Nominal GDP in 2010 = $200 billion

Nominal GDP in 2009 = $180 billion

GDP deflator in 2010 = 125

GDP deflator in 2009 = 105

Percentage change in prices:

= Percentage change in GDP deflator

= (Change in GDP deflator ÷ GDP deflator in 2009) × 100

= [(125 - 105) ÷ 105] × 100

= (20 ÷ 105) × 100

= 0.19 × 100

= 19%

Therefore, the prices increases by 19%.

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