Macro Unit 2.6B- GDP Deflator Practice AP Macroeconomics

Mr. Clifford explains the GDP deflator, a tool used to adjust nominal GDP for inflation, making it comparable to real GDP. He provides the formula for calculating the GDP deflator and explains its significance through examples. The video includes practice questions to help viewers understand how to calculate nominal GDP, real GDP, and the GDP deflator. Solutions to these questions are provided, emphasizing the logic behind the calculations. The video concludes with a summary of the key concepts discussed.

What does a GDP deflator of 95 indicate about price changes since the base year?

Explain the relationship between nominal GDP, real GDP, and the GDP deflator.