What is price Index? Explain the Concept of GDP deflator.
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A price index is a normalized average of price relatives for a given class of goods or services in a given region, during a given interval of time.It is a statistic designed to help to compare how these price relatives, taken as a whole, differ between time periods or geographical locations. The GDP deflator, also called implicit price deflator, is a measure of inflation.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.
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