Discussion
The nominal GDP is ₹36,000 and real GDP is ₹34,000. GDP deflator therefore is:
Answer: A
The GDP deflator is the ratio of nominal GDP to real GDP (multiplied by 100 to express it as an index).
\[ \text{Deflator} = \frac{\text{Nominal GDP}}{\text{Real GDP}} \] \[ \frac{36000}{34000} \]
The result is about 1.06, which means prices have risen 6 per cent from the base year. The inverse ratio, 34000/36000, would be below one, the difference 36000 - 34000 is the gap in rupees and not a price index, and the product has no meaning. The answer is option A.
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