Read the two statements and choose the correct option.
I. In the base year, real GDP equals nominal GDP.
II. In the base year, the GDP deflator is 100.

Only ICorrect answerYour answerOnly IICorrect answerYour answerBoth I and IICorrect answerYour answerNeither I nor IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

In the base year, current prices are the base prices, so the two GDPs are equal. I is true.
Equal GDPs give a deflator of 100. II is true.

Ten questions from National Income Aggregates & GDP, at your own pace.

Ten questions from National Income Aggregates & GDP, at your own pace.

Read the two statements and choose the correct option.I. In the base year, real GDP equals nominal GDP.II. In the base year, the GDP deflator is 100.