Chapter 8.3 Flashcards
1
Q
What does nominal GDP measure and what does real GDP measure?
A
Nominal GDP measures the value of current output valued at current prices while real GDP measures the value of current output at constant prices
2
Q
Price deflator
A
Price indexes that are used to measure average prices of on period relative to that of a base year
3
Q
Equation for the calculation of real GDP from nominal GDP
A
Real GDP = nominal GDP divided by price deflator
