### CFA Practice Question

There are 539 practice questions for this study session.

### CFA Practice Question

Given the following information, the price level increased (from 1990 to 2000) by ______. The increase in the GDP deflator from 120 to 180 is approximately 50 percent.

User Comment
sharon Note the word "price level"
Yasir 180 - 120 = 60/120
kaliokale any thought on this:

real GPD 2000 base on 1990= 9000*120/180=6000
(6000-5000)/5000=20%

I don't understand why the answer is 50%!?
gord Kaliokale...see above comments. You are correct, but the question was asking for the price level increase, not the increase in real GDP
thekapila price level increase = 120/180 = 2/3 = approx 60%
or else..120 + 50%(120) = 120 +60 = 180..approx 50 %
ashok1959 Another way:
9000*120/180 =6000.00
Difference of real GDP and Nominal=9000 - 6000=3000
So 3000in Nominal GDP out of 9000 is Just due to price level increase. Hence price increased by 3000 / 5000 = 60 percent since base GDP.
jassosahan No confusion, measure is price index to price index.so 50%
dmaccowan (180-120) / 120 = 0.5 or 50%

The basket cost 120 and now costs 180.
jonan203 on hp12c
9000 <enter><enter>
120 <enter>
180 <divide>
<times>
<enter>
9000
<% change>
= %50