In any year, nominal GDP divided by the GDP chain price index times 100 equals real GDP.

Question

Quizplus · Accepted Answer

This formula is used to calculate real GDP by adjusting for inflation. Nominal GDP is the total value of goods and services produced in an economy, while the GDP chain price index measures the average price level changes of those goods and services over time. Dividing nominal GDP by the GDP chain price index and then multiplying by 100 gives us the value of real GDP adjusted for inflation.

In Any Year, Nominal GDP Divided by the GDP Chain