GDP Price Deflator


DEFINITION of 'GDP Price Deflator'

An economic metric that accounts for inflation by converting output measured at current prices into constant-dollar GDP. The GDP deflator shows how much a change in the base year's GDP relies upon changes in the price level. Also known as the "GDP implicit price deflator."


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BREAKING DOWN 'GDP Price Deflator'

Because it isn't based on a fixed basket of goods and services, the GDP deflator has an advantage over the Consumer Price Index. Changes in consumption patterns or the introduction of new goods and services are automatically reflected in the deflator.

  1. Economy

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  2. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  3. Inflation

    The rate at which the general level of prices for goods and services ...
  4. Consumer Price Index - CPI

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  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise ...
  6. Gross National Product - GNP

    Gross National Product (or GNP) is an economic statistic that ...
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  1. What does it signify if there is a large discrepancy between a nation's real and ...

    A large discrepancy between a nation's real and nominal GDP signifies inflationary or deflationary forces in the economy. ... Read Full Answer >>
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    The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a country's economy. It represents ... Read Full Answer >>
  3. When do economists use real GDP instead of GDP?

    Economists use real GDP when they want to monitor the growth of output in an economy. Nominal GDP, typically referred to ... Read Full Answer >>
  4. Is the consumer price index (CPI) the best measure of inflation?

    The consumer price index (CPI) measures food; beverages; housing; apparel; transportation; medical care; recreation; education ... Read Full Answer >>
  5. Is Israel a developed country?

    Israel is considered a developed country, although it has substantial poverty and large income gaps. The International Monetary ... Read Full Answer >>
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