# Why is nominal GDP deflated to get real GDP?

I am confused at the explanation below which explains why nominal GDP must be deflated to get real GDP. I thought the GDP deflator would decrease if prices are declining, so how does this result in nominal GDP being "deflated"?

Cheers

• "for years before the base year" - what does this tell you? Oct 27, 2021 at 8:42

The GDP deflator is, by definition, the price of real GDP. $$GDP(nominal) = Price \times GDP(real)$$ It is an index that is equal to 1 (or sometimes quoted as 100) in the base year. That means in particular that nominal GDP is the same as real GDP in the base year.