Which of the following statements is/are correct? 1. GDP deflator captures the average price of an unchanging basket of commodities that constitutes the GDP of the country. 2. GDP deflator can be used to measure the real GDP of the economy but not the inflation rate. Select the correct answer using the code given below.

- Statement 1 is incorrect. The GDP deflator is a price index that reflects the prices of all domestically produced goods and services in GDP. It does not use an unchanging basket of commodities; the basket of goods and services included in the GDP changes year to year based on production patterns. This contrasts with indices like the Consumer Price Index (CPI), which uses a fixed basket. - Statement 2 is incorrect. The GDP deflator is indeed used to calculate Real GDP from Nominal GDP (Real GDP = Nominal GDP / GDP Deflator 100). However, it is also commonly used as a measure of the economy's overall inflation rate. Inflation rate between two periods can be calculated from the percentage change in the GDP deflator.