The GDP Deflator in Year 2 Is 105, Using Year

Multiple Choice

The GDP deflator in year 2 is 105, using year 1 as the base year.This means that, on average, the cost of goods and services is

A) 5% higher in year 2 than in year 1.
B) 105% higher in year 2 than in year 1.
C) 5% higher in year 1 than in year 2.
D) 105% higher in year 1 than in year 2.
E) 95% higher in year 2 than in year 1.