Question -
Answer -
The value of GNP of that countiy during the same year evaluated at the prices of the same base year was Rs 3,000 crores. Calculate the value of the GNP deflator of the year in percentage terms. Did the price level rise between the base year and the year under consideration?
Answer
GNP deflator = Nominal GNP/Real GNP x 100 = 83.3%
No, the price level did not rise between the base year and the year under consideration. In fact, it fell.