Economic Awareness - Sectors of Indian Economy
Which of the following is used to measure the overall inflation in the economy based on GDP data?
Which of the following is used to measure the overall inflation in the economy based on GDP data?
easy Q3 of 15
Step-by-Step Solution
Step 1: Identify inflation measures
CPI and WPI measure inflation for consumer and wholesale goods respectively, while GDP Deflator measures inflation for all goods and services in GDP.Step 2: Apply concept
GDP Deflator is calculated as (Nominal GDP / Real GDP) × 100 and reflects overall price changes in the economy.Final Answer:
GDP Deflator → Option DQuick Check:
GDP Deflator = inflation measure based on GDP data ✅
Quick Trick: GDP Deflator = Nominal ÷ Real × 100
Common Mistakes:
- Confusing GDP Deflator with CPI or WPI which cover limited baskets.
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