Answer:
GNP of an economy valued at current year prices = Rs.2,800 crore GNP of an economy valued at base year prices = Rs.3,200 crore \[\text{GNP}\,\text{Deflator=}\frac{\text{GNP}\,\text{Valued}\,\text{at}\,\text{Current}\,\text{Year}\,\text{Prices}}{\text{GNP}\,\text{Valued}\,\text{at}\,\text{base}\,\text{Year}\,\text{Prices}}\text{ }\!\!\times\!\!\text{ 100}\] \[=\frac{2,800}{3,200}\times 100=87.5%\] No, the price level has not risen between the base year and the year under consideration. Rather, it has fallen by 12.5%.
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