MEA-1.J—Calculate real GDP and the GDP deflator

Calculate real GDP and the GDP deflator.

• One way of measuring real GDP is to weigh final goods and services by their prices in a base year. Because this can lead to overstatement of real GDP growth, statistical agencies actually use different methods.
• Nominal GDP can be converted to real GDP by using the GDP deflator.
• Enduring understanding MEA-1: An economy’s performance can be measured by different indicators such as gross domestic product (GDP), the inflation rate, and the unemployment rate.