Answer to Question #145086 in Macroeconomics for Sive

Question

How to calculate real GDP?

Answer 1

Real GDP refers to an inflation adjusted for all goods produced and sercices offered by a given country.

Real GDP is calculated by taking the current market prices (nominal GDP) and dividing it by corresponding GDP deflator.

GDP deflator is the measure of price inflation and is calculated by dividing nominal GDP by real GDP and multiplying the result by 100

Nominal GDP is the sum of current prices of all goods and services produced in a country.