JNU SSS 2011 Question 14: National income accounting
Consider an economy in which only three goods X, Y and Z are produced. X and Y are consumption goods and the output of Z in a year is used up in production of X and Y in that year. The following table gives the unit prices (pX, pY and pZ rupees respectively) and the number of units produced (qX, qY and qZ respectively) of each of the goods for three years I, II and III :
Year
pX
qX
pY
qY
pZ
qZ
I
1
2
2
5
1
2
II
1·5
3
2
6
1·5
4
III
1·5
6
3
6
2
5
If year I is the base year, what is the value of the GDP deflator in year III?
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Plain-text version
Consider an economy in which only three goods X, Y and Z are produced. X and Y are consumption goods and the output of Z in a year is used up in production of X and Y in that year. The following table gives the unit prices (p_X, p_Y and p_Z rupees respectively) and the number of units produced (q_X, q_Y and q_Z respectively) of each of the goods for three years I, II and III: | Year | p_X | q_X | p_Y | q_Y | p_Z | q_Z | I | 1 | 2 | 2 | 5 | 1 | 2 | II | 1·5 | 3 | 2 | 6 | 1·5 | 4 | III | 1·5 | 6 | 3 | 6 | 2 | 5 | If year I is the base year, what is the value of the GDP deflator in year III? (A) 100 (B) 130·77 (approx.) (C) 141·67 (approx.) (D) 150
National income accounting has come up 132 times in 6 exams since 2010.
What this question tests
This question is on Price indices: the GDP deflator and CPI, part of National income accounting in Macroeconomics.
How the price level and inflation are measured, and how the deflator differs from the CPI.
TestStop has 18 past-paper questions on this subtopic.
