I believe its a typo. Another way to think about is that generall level of prices, that we have talked about it, this is not an easy thing to measure But if attempted to that the generall level of prices has gone up by 2.5 %, when form 100 to 102.5. Direct link to Sudhanshu Sisodiya's post So the CPI basically meas, Posted 7 years ago. Then, compare the two rates over a period of years to assess how the growth rates stack up against each other. Suppose that in the year following the base year, the GDP deflator is equal to 110. See our GDP per Capita calculator to learn more. indexing is adjusting a nominal value to changes in expected inflation. a price index used to adjust nominal GDP to find real GDP; the GDP deflator measures the average prices of all finished goods and services produced within a nations borders over time. All tip submissions are carefully reviewed before being published. Nominal GDP is defined as the monetary value of all finished goods and services within an economy valued at current prices (see also GDP). Direct link to Christopher's post I believe its a typo. According to the article, an increase in GDP occurs for two reasons: (1) an increase in prices or (2) an increase in output. 100% (1 rating) Formula to calculate % change in nominal GDP nominal GDP of the current year - nominal GDP of previous year/ nominal GDP of previous year 100 Formula to calculate % change in real GDP Real GDP of the current year - real GDP of previous year/ real . Is it 1.15 or is it 115%? How do you calculate? Example. Gross National Income (GNI) is calculated a country's GDP plus net income received from overseas sources. In this first example, consider the following: James wanted to buy a $22 bowl set but didnt have money at the time. 3. It is used for many purposes in finance, often to represent the price change of a security . Here, this is a newly formed country and wants to know its growth so that one can judge when one compares the nominal growth domestic product with a similar nation. In this case, the calculation was rather easy, but it shows that the value of the U.S. has been inflated by 24.6%. Use it to try out great new products and services nationwide without paying full pricewine, food delivery, clothing and more. Further, nominal GDP also encompasses inflation. As you can see, there are a plethora of ways you can use percentages to your advantage. Why do increases in real GDP indicate an improvement in living standards, whereas increases in nominal GDP might not? Because of that, our measure of output might get distorted by something like inflation. {"smallUrl":"https:\/\/www.wikihow.com\/images\/thumb\/3\/3d\/Calculate-the-Growth-Rate-of-Nominal-GDP-Step-1-Version-2.jpg\/v4-460px-Calculate-the-Growth-Rate-of-Nominal-GDP-Step-1-Version-2.jpg","bigUrl":"\/images\/thumb\/3\/3d\/Calculate-the-Growth-Rate-of-Nominal-GDP-Step-1-Version-2.jpg\/aid1375096-v4-728px-Calculate-the-Growth-Rate-of-Nominal-GDP-Step-1-Version-2.jpg","smallWidth":460,"smallHeight":345,"bigWidth":728,"bigHeight":546,"licensing":"