Economics Gdp Questions
The difference between GDP and GNP deflator inflation rate lies in the measures they use to calculate inflation.
GDP deflator inflation rate is a measure of inflation that compares the current prices of all goods and services produced within a country's borders (Gross Domestic Product) to a base year. It reflects the overall price level changes within the domestic economy.
On the other hand, GNP deflator inflation rate compares the current prices of all goods and services produced by a country's residents, regardless of their location (Gross National Product), to a base year. It takes into account the income earned by a country's residents, both domestically and abroad.
In summary, while GDP deflator inflation rate focuses on the prices of goods and services produced within a country's borders, GNP deflator inflation rate considers the prices of goods and services produced by a country's residents, regardless of their location.