Question

Consider a hypothetical economy where only apples and oranges are produced for three years: | Apples| | Oranges|
---|---|---|---|---
Year| Quantity (Kg.)| Price (Rs. per Kg.)| Quantity (Kg.)| Price (Rs. per Kg.)
2015| 10| 180| 5| 200
2016| 15| 200| 12| 300
2017| 18| 250| 15| 350
Which of the following is/are CORRECT?

• A. Real GDP in the year 2017 (base year = 2016) is Rs. 4,250
• B. Real GDP in the year 2016 (base year = 2015) is Rs. 3,500
• C. Nominal GDP in the year 2015 is Rs. 6,600
• D. Price level, as measured by GDP deflator, increased in 2017 as compared to 2016 (base year = 2016)

Answer 1

Answer: (D)

Price level, as measured by GDP deflator, increased in 2017 as compared to 2016 (base year = 2016)

Answer 2

The correct Options is (D) : Price level, as measured by GDP deflator, increased in 2017 as compared to 2016 (base year = 2016)