The table below displays an economy that produces only two goods: rubber ducks and laptop chargers for the years 2015 and 2016. Using the GDPdeflator, the inflation rate between 2015 and 2016 is approximately equal to
2015 price./quantity 
2016 price/quantity 

rubber ducks  $2 / 3,000  $3 / 2,000 
laptops  $10 / 4,000  $11.50 / 3,000 
13.58%
1.358%
19.12%
1.912%
100%
1%
Ans: 19.12%
Explanation:
Nominal GDP in 2015 = ($2 * 3000) + ($10 * 4000) = $46,000
Real GDP in 2015 = ($2 * 3000) + ($10 * 4000) = $46,000
Since 2015 is base year, Nominal GDP and Real GDP are equal
GDP Deflator = (Nominal GDP / Real GDP) * 100
= ($46,000 / $46,000) * 100
= 100
Nominal GDP in 2016 = ($3 * 2000) + ($11.50 * 3000) = $40,500
Real GDP in 2016 = ($2 * 2000) + ($10 * 3000) = $34,000
GDP Deflator = (Nominal GDP / Real GDP) * 100
= ($40,500 / $34,000) * 100
= 119.12
The inflation rate between 2015 and 2016 = [(119.12  100) / 100] * 100 = 19.12%
The table below displays an economy that produces only two goods: rubber ducks and laptop chargers...
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