A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities Year Price of Ice Cream Quantity of Ice Cream Price of Pie Quantity of Pie 2008 $2.50 40 $5.00 20 2009 $3.00 50 $6.00 25 2010 $4.00 40 $6.00 30 Refer to Table 23-9. This country’s inflation rate from 2009 to 2010 to the nearest tenth was
A. real GDP was $250, and the GDP deflator was 125
B. real GDP was $240, and the GDP deflator was 125
C. real GDP was $240, and the GDP deflator was 120
D. real GDP was $250, and the GDP deflator was 120
Answer: D. real GDP was $250, and the GDP deflator was 120
RGDP=(base price * current quantity)
NGDP=(current price * current quantity)
GDP dflator=NGDP/RGDP
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a. true b. false