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Results tagged with gdp
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user 18156
Gross Domestic Product (GDP) is a flow measure of the value of finished goods and services produced within a country's borders in a specific time period. GDP is typically calculated on an annual basis.
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"The GDP deflator reflects what's happening to prices not quantities." Is this true?
I'm assuming that we are defining the annual GDP deflator between period $t-1$ and period $t$ as:
$$\frac{\text{nominal GDP}}{\text{real GDP}} = \frac{\sum (P_t\times Q_t)}{\sum (P_{t-1}\times Q_t)} $ … If we interpret the 'what's happening to' in the quote to mean annual change to, then it would read as:
$$\text{the GDP deflator reflects the annual change in prices not the annual change in quantities …
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