CPI and PPI and GDP can someone help with macroeconomics?

S

Savetheworld

New member
Nominal GDP is just the total value of goods and produced in the country in that particular year. Real GDP deals with comparing the goods and services produced with another year taking inflation into account. This way we come to know whether there has been an actual increase in goods and services produced and not just a higher amount because of inflation. Inflation is measured by the CPI. Therefore, to get the real GDP of any country we need to know not only what the nominal GDP of that country but also its CPI.
 
what is the difference between real and nominal GDP?. How does the CPI (consumer price index) or the PPI (producer price index) enter into this discussion.
 
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