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One of these four statements about the GDP deflator is correct. Which one?
It is a price index that is based on all the GDP components.
It is a price index that is based on all the GDP components except net exports.
It is a price index that is based on all goods and services produced by US nationals (including abroad).
It is based on the prices of merchandise that is exported or imported.



Answer :

GinnyAnswer

Final answer:

The GDP deflator is a price index based on all GDP components except net exports.


Explanation:

The correct statement about the GDP deflator is: It is a price index that is based on all the GDP components except net exports.

The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy. It is calculated using nominal GDP and real GDP, reflecting price inflation or deflation of these components.

This differs from a price index based on merchandise exported or imported, as it encompasses all components of the GDP except for net exports.


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