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Moderate

Country's Economy Based on GDP Deflator

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Assume the GDP deflator for a country in 2000 is 105.

In 2001 the GDP deflator is 95. What has happened to that country's economy?

A

The country has experienced inflation.

B

The country has moved into an expansion phase of the business cycle.

C

The country's unemployment rate has fallen.

D

The country has experienced deflation.

E

The country's GDP has increased.