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Economy

GDP Deflator

What is GDP Deflator?

A price index covering everything produced in an economy.

Understanding GDP Deflator

The GDP deflator compares nominal and real GDP. Unlike the CPI, it covers all domestically produced goods and services, including investment goods and government purchases, and excludes imports.

It is one of several inflation measures, alongside the CPI and the PCE price index.

Formula

GDP deflator=Nominal GDPReal GDP×100\text{GDP deflator} = \frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100
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