The following table gives nominal and real GDP for an econom

The following table gives nominal and real GDP for an economy for two years. Nominal GDP Real GDP Year 1 1320.0 1,200 Year 2 1680.0 1440.0 Based on the table, in Year 2, the value of the GDP deflator is (Round your answer to one decimal place ) The inflation rate between Year 1 and Year 2 1% (Round your answer to one decimal place ) Enter your answer in each of the answer boxes 0 Type here to search

Solution

GDP Deflator for Year 2=Nominal GDP/Real GDP*100=1680/1440*100=116.67

Inflation rate between year 1 and 2 =(1680)/1320/(1440)/1200=(1.2727/1.2)-1=6.05%