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GDP Deflator

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GDP Deflator

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GDP Deflator

  1. 1. Inflation Cause: Printing money faster than making goods Effect: Rising prices
  2. 2. Nominal vs. Real
  3. 3. Nominal Current prices Current quantity
  4. 4. Real will always have a base year
  5. 5. Real Constant prices Current quantity
  6. 6. GDP Deflator Nominal GDP Real GDP= x 100
  7. 7. Pizza Soda Year Price Qty Total Price Qty Total Total Total % Change 2010 25 100 2500 5 50 250 2750 2011 35 134 4690 6 40 240 4930 79.3% 2011* 25 134 3350 5 40 200 3550 29.1% 2012 45 150 6750 7 30 210 6960 41.2% 2012* 25 150 3750 5 30 150 3900 9.9% * Prices adjusted to 2010 Rates Real versus Nominal GDP
  8. 8. GDP Inflation Rate GDP DelflatorYear 2 - GDP DelflatorYear 1 GDP DelflatorYear 1= x 100

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