Editing Macroeconomics (section)

=== GDP Deflator Equation & Explanation ===
Another concern with measuring a country's economic growth is that even though we see the GDP growing, that does not inherently mean the economy is growing. Most of the increase in GDP may just be due to inflation. To know whether this is the case, we have to calculate the GDP Deflator which adjusts the GDP for inflation.

GDP Deflator = (Nominal GDP/Real GDP) x 100<ref>{{Cite web |title=GDP Deflator {{!}} Formula + Calculator |url=https://www.wallstreetprep.com/knowledge/gdp-deflator/ |access-date=2025-02-25 |website=Wall Street Prep |language=en}}</ref>

Nominal GDP is GDP that includes inflation and Real GDP is GDP adjusted for inflation. To adjust for inflation means that the effect of inflation on the value was removed.

A GDP Deflator of 100 indicates that there is no inflation nor deflation. A GDP Deflator value that is greater than 100 indicates that there is inflation. A GDP Deflator value that is less than 100 indicates that there is deflation.