How To Calculate Real GDP?

Choose a base year

Use base-year prices for all goods and services

Multiply each quantity produced in the current year by its base-year price

Add the results for all goods and services

Real GDP = Σ(current-year quantity × base-year price)

If needed, use the GDP deflator formula: Real GDP = Nominal GDP ÷ (GDP deflator ÷ 100)

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