Investments glossary

GDP Price Deflator Definition

The GDP price deflator measures the changes in prices for all of the goods and services produced in an economy. Gross domestic product or GDP represents the total output of good and services. However, as GDP rises and falls, the metric doesn’t consider the impact of inflation or rising prices on the GDP results. The GDP deflator shows the extent of price changes on GDP by first establishing a base year, and secondly, comparing current prices to prices in the base year.

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