The GDP deflator in year 2 is 95 using year 1 as a base year. This means that, on average, the price of goods and services is

A. 5% higher in year 2 than in year 1.
B. 105% higher in year 1 than in year 2.
C. 105% higher in year 2 than in year 1.
D. 5% higher in year 1 than in year 2.


Answer: D

Economics

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