Answer to Question #116089 in Macroeconomics for Bryan

Question

How do I find a country’s real GDP?

Answer 1

The real GDP is the total value of all of the final goods and services that an economy produces during a given year, accounting for inflation. It is calculated using the prices of a selected base year. To calculate Real GDP, you must determine how much GDP has been changed by inflation since the base year, and divide out the inflation each year. Real GDP, therefore, accounts for the fact that if prices change but output doesn’t, nominal GDP would change.

$Real GDP=\frac{Nominal GDP}{GDP deflator}\times100$