If nominal GDP equals $5,000 and real GDP equals $4,000, then the GDP Deflator equals

Consider the following statements about the GDP Deflator. 1. GDP deflator is the ratio of nominal GDP to real GDP. 2. GDP deflator indicates the change in the price level between the base year and the current year. 3. While calculating GDP deflator, the volume of production is considered as fixed. Which of statements given above is/are correct?

A

1, 2 and 3

B

2 and 3

C

3 only

D

1 and 3 only

If nominal GDP equals $6,000 and the GDP deflator equals 200, then real GDP equals

A

$30

B

$3,000

C

$12,000

D

$1,200

The following sentences form a paragraph.They are numbered as P, Q, R and S. These four parts are not given in their proper order. Read the sentences and choose the alternative that arranges them in correct order. P. It is the ratio of the value of goods and services an economy produces in a particular year at current prices to that of prices that prevailed during the base year. Q. The GDP deflator, also called implicit price deflator, is a measure of inflation. R. Since the deflator covers the entire range of goods and services produced in the economy — as against the limited commodity baskets for the wholesale or consumer price indices — it is seen as a more comprehensive measure of inflation. S. This ratio helps show the extent to which the increase in gross domestic product has happened on account of higher prices rather than increase in output.

A

QPSR

B

RPSQ

C

QSPR

D

RQSP

Suppose a country produces only two goods, pizza and soda. Given the information in the table below, nominal GDP, real GDP, and the GDP deflator in 2005 are (assume 2004 is the base year):

A

800 400 200

B

130 260 50

C

260 130 200

D

260 196 133

Consider the following statements about GDP Deflator: 1. It is an index number which measures inflation. 2. It is used to get the value of Nominal GDP from Real GDP. Select the correct option from below:

A

1 only

B

2 only

C

Both 1 and 2

D

Neither 1 or 2

The GDP Deflator differs from the CPI in that the GDP Deflator

A

is thought to slightly overestimate the inflation rate

B

uses base year quantities in its calculations

C

incorporates both current year prices and base year prices

D

incorporates current year quantities in its calculations

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer:
Assertion (A) The nominal interest rate comprises of a real interest rate and an expected rate of inflation and it adjusts when the inflation rate is expected to change. Hence, in the perfect international capital markets, real rate of returns are equal in the two countries.
Reason (R) The international fisher effects states that the nominal interest rate differential must be equal to the expected inflation rate differential In the two countries.

A

Both (A) and (R) are correct and (R) is the right explanation of (A)

B

Both (A) and (R) are correct, but (R) is not the right explanation of (A)

C

(A) is correct, but (R) is not correct

D

Both (A) and (R) are incorrect

Consider with respect to HusserI's concept of phenomena.
1. Phenomena is a substantial unity that has real properties, real parts and real changes.
2. Phenomena is no substantial unity, that has no real parts and no real changes.
3. Phenomena has no nature, but only essence.
4. Phenomena have no essence, but only nature.

A

Only (1) is true

B

Only (2) and (3) are true

C

Only (1) and (3) are true

D

Only (1), (3) and (4) are true

What is the relation between nominal GDP and real GDP in a country with positive inflation during a fiscal year?

A

Real GDP is always less than nominal GDP.

B

Real GDP is always more than nominal GDP.

C

Real GDP may be more or less depending on inflation level.

D

Real GDP does not depend on inflation level

If Real GDP = $200 billion and the price index = 200, Nominal GDP is

A

$4 billion

B

$400 billion

C

$200 billion

D

$2 billion

If nominal GDP equals $5,000 and real GDP equals $4,000, then the GDP Deflator equals

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