- CFA Exams
- 2021 CFA Level I Exam
- Study Session 4. Economics (1)
- Reading 14. Aggregate Output, Prices, and Economic Growth
- Subject 1. Gross Domestic Product
CFA Practice Question
Given the following information, the price level increased (from 1990 to 2000) by ______.
Correct Answer: 50%
The increase in the GDP deflator from 120 to 180 is approximately 50 percent.
User Contributed Comments 9
| 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 |