Q. Which of the following is/are a measure/s of Inflation in an economy?

1. GDP deflator.
2. Consumer Price Index.
3. Whole sale Price Index.

Select the correct answer from the codes given below:
Answer: All of the above
Notes: Notice that the ratio of nominal GDP to real GDP.gives us an idea of how the prices have moved from the base year (the year whose prices are being used to calculate the real GDP) to the current year. In the calculation of real and nominal GDP of the current year, the volume of production is fixed. Therefore, if these measures differ it is only due to change in the price level between the base year and the current year. The ratio of nominal to real GDP is a well known index of prices. This is called GDP Deflator. There is another way to measure change of prices in an economy which is known as the Consumer Price Index (CPI). This is the index of prices of a given basket of commodities which are bought by the representative consumer. Wholesale Price Index is a measure of the changes in the price of product which are traded in bulk.