economy

Mika Asked:

What is the significance of the GDP deflator?

Answer this question

Liked this question? Tell your friends about it

Facebook Windows Live Yahoo Twitter Digg Google del.icio.us Reddit

Link

Embed

Copy and paste the text above to share this Q&A

2 Answers

Order by: Oldest to Newest; Newest to Oldest; Votes

David Reed Answered:

From an interest rate persepctive, the GDP deflator is a measure of the change in price of the GDP itself. Much like the Consumer Price Index, or CPI, it reflects the price changes, up or down, of all the goods and services produced in the United States. Calm prices, rates stabilize. Prices rise, rates go up due to inlfationary fears.

Posted 4 years ago
Helpful (1)

David Reed is <a href="http://walletpop.com" rel="nofollow">WalletPop</a> 's Mortgage Expert

Add a comment

Helpful? (2)

Report

The Surge Research Support Answered:

GDP measured in nominal terms expresses the value of goods and services using the current level of prices, however to compare GDP (of different years) one needs the measure of Real GDP which uses constant base-year prices to value the goods and services produced in any year. The GDP deflator for a particular year, calculated as (Nominal GDP/Real GDP)×100, reflects the average prices of all goods and services produced in the economy for that year. The GDP deflator is similar to the consumer price index in that it measures inflation; or the cost of living at a particular period of time. However, CPI measures a fixed basket of goods and services while the GDP deflator takes into account a much broader variety of goods and services, especially new ones that are introduced into the economy. Further, technically the GDP deflator gives a measure of inflation for all goods produced domestically (CPI may include goods produced abroad but entering the domestic consumers’ basket). For more Economic/Financial Terminology see http://www.ecofin-surge.co.in/terminology.html

Posted 3 years ago

Add a comment

Helpful? (0)

Report

Related Questions

Other people asked questions on similar topics, check out the answers they received:

Asked: Germany has the world's 4th largest economy ...

Germany has the world's 4th largest economy, yet about half their retailers don't accept credit cards and very few stores, not even restaurants are open on Sunday. That's a joke. The fourth largest ...