When differences between nominal GDP and real GDP result due to price changes and nothing else is compared an index is created called the?

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2026-03-15 21:25

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The index created to measure the differences between nominal GDP and real GDP due to price changes is called the GDP deflator. It reflects the changes in price levels and helps to adjust nominal GDP for inflation or deflation, allowing for a more accurate comparison of economic output over time. By using the GDP deflator, economists can assess the real growth of an economy by separating the effects of price changes from actual increases in production.

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