Economics Real Vs Nominal Gdp Questions
The difference between GDP and GNP deflator growth rate lies in the measures they use to calculate inflation. GDP deflator measures the average price change of all goods and services produced within a country's borders, regardless of who owns the production factors. On the other hand, GNP deflator measures the average price change of all goods and services produced by a country's residents, regardless of where the production takes place. Therefore, the GDP deflator growth rate reflects the inflation rate within a country's borders, while the GNP deflator growth rate reflects the inflation rate experienced by a country's residents, regardless of their location.