February Nominal GDP

Nominal GDP: the value of output produced in current prices

  P(TIMES)Q( output)

 Current year price

 Can increase from year to year if either output or prices increase

  Real GDP- The value of output produced in constant base year price

Price times Quantity

Can increase year to year if output increases

THINGS TO REMEMBER

In base year the current price will always be equal to the constant price

After base year Nominal GDP will exceed real GDP

In years before the base year real GDP will exceed nominal GD

Base year is always the earliest year if they don’t give it

GDP Deflator: it is a price index used to adjust from nominal to real GD

Formula:

(Nominal GDP / Real GDP) multiplied by 100

ALSO THINGS TO REMEMBER TOWARDS GDP DEFLATOR

In the base year GDP deflator will always equal 100

For years after the base year GDP deflator will be greater than 100

For years before the base year GDP deflator will be less than 100

Consumer price index (CPI)

It measure inflation by tracking changes in the price of a market basket of goods

(Price of the market basket in the current year / market basket in the base year) * 100

VIDEO ABOVE SHOULD GIVE A MORE IN DEPTH LEARNING BASED OFF THE NOTES IN THIS BLOG!!! SHOULD REALLY HELP