The Existent GDP removes inflation from prices.
The shortening GDP stands for gross trained product. The Nominal GDP is the fee of the complete products produced by a sovereign state with inflation taken into carefulness. For instance, if the Nominal GDP is $900,000, then the Real GDP is $900,000/1.009, or $891,972. The Real GDP, however, only changes if the production rate changes. The Real GDP is useful in comparing the current price of products to prices in previous years.
Instructions
1. Find the current GDP deflator percentage for the country as calculated by the World Bank.
2. Divide the GDP deflator by 100 and add one to the value. For instance, the current GDP deflator for the USA (as of publication date) is 0.9 percent. So, (0.9/100) + 1 yields 1.009.
3. Divide the nominal GDP by the value from Step 2 to yield the Real GDP. The Factual GDP is the market price of the complete products based on the price of dollars in preceding caducity. Nominal GDP changes with inflation rates. For instance, whether a country makes the same number of products, but the inflation rate in country leads to higher prices, then the Nominal GDP increases.
