Real vs Nominal (1 Viewer)

[spatula232]

Converting between real and nominal GDP for example, is it simply the nominal over inflation

http://www4.boardofstudies.nsw.edu....wer=B&courseID=15110&testQuestionID=343275621

If so, I worked this out to equal 1%. Why would that be 0 growth?? Or does that just mean it was equal to last year?

 

[swagmeister]

Can't see the image
But real GDP is nominal GDP when you take into account inflation (pretty sure the formula is real = nominal x (base year / CPI))

 

[spatula232]

My computer won't let me upload the photo. But yes, that makes sense, thanks man

 

[spatula232]

Also, is the base year always the original or is it the one before the year you're finding?

 

[swagmeister]

Always original year generally

 

[Ekman]

Here is the formula:

100 X Nominal GDP / CPI = Real GDP

 

[swagmeister]

Here is the formula:

100 X Nominal GDP / CPI = Real GDP

sometimes the base year doesn't have 100 CPI though, and you just have to work it out logically

 

[Ekman]

sometimes the base year doesn't have 100 CPI though, and you just have to work it out logically

The base year doesn't have to have a CPI of 100, so just look at the change in GDP between years.