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JAMB Economics 2007 Question 25

Question 25

National Income

Corrections in the GNP figures for price changes require the use of a

  1. A.price deflator
  2. B.price index
  3. C.retail price index
  4. D.producer price index
Show the answer and explanation

Answer: A (price deflator)

Explanation

To remove the effect of price changes, nominal GNP is divided by the GNP price deflator to give real GNP.