The inflation rate calculated with the help of the gross domestic product, or GDP, deflator uses the price index that indicates how much of the GDP has changed in the previous year is based on changes in the price level.... More »

To calculate inflation using the consumer price index, or CPI, subtract the CPI of the previous year from the CPI of the current year, divide the result by the CPI of the previous year, and then multiply the outcome by 1... More »

Inflation generally increases when the gross domestic product (GDP) growth rate is above 2.5 percent due to several factors, such as demand for goods overstretching supply and higher wages in an ultra-competitive job mar... More »

The real Gross Domestic Product per person, or per capita, is calculated by first adjusting the nominal GDP of a country for inflation by dividing the nominal GDP by the deflator. The adjusted number, or real GDP, is the... More »

GDP, or gross domestic product, is a way to measure a country's economy by adding up the total amount of all services and goods produced within that country in a given year. GDP is used to help determine the health of an... More »

The Federal Open Market Committee considers an inflation rate that increases annually by 2 percent to be a healthy indicator of price stability and maximum employment. A small level of inflation reduces the chance of har... More »

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The GDP formula is GDP = C + I + G + (Ex - Im). "C" represents the total consumer spending, "I" represents total investment by businesses, "G" is total government spending, "Ex" is exports and "Im" is imports. More »