CFA Practice Question

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CFA Practice Question

Suppose the base year for the GDP deflator was 1990 and its value was 100. The value of the deflator was 148 for 2010. This indicates that the general level of prices ______

A. remained constant between 1990 and 2010.
B. was lower in 2010 than in 1990.
C. was higher in 2010 than in 1990.
Correct Answer: C

Increases in the GDP deflator indicate a rising price level.

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